International Human Resource Management - Starbucks Corporation - Case Study Example

International Human Resource Management Student’s Name Institution International Human Resource Management Introduction Starbucks Corporation is a renowned international retailer, roaster and brand of Specialty coffee, with more than 12000 company-operated and licensed stores around the world. Starbucks international licensed retail stores are operated through licensing arrangements and joint ventures with established retailers or restaurants. The Starbucks brand portfolio includes Ethos™ water, Starbucks™ Liqueurs, Tazo® teas and Hear Music® CDs, these brands enable Starbucks to appeal to a broader customer base (Starbucks, 2011). The company’s workforce is comprised of different professionals, including retail operators, accountants, marketers, IT professionals, store clerks among others. Starbucks Corporation has been able to successfully enter the Chinese market despite the spiral effect of the recession in Europe and the United States which took a toll on emerging economies. Research indicates that Starbucks success in foreign countries such as China is attributed to its committed and highly motivated workforce. Starbucks is looking into sending an employee to China (Wang, 2012). The following plan is a consistent cross-cultural training and support strategy for the employee. Part A of this plan addresses key IHRM information, including business strategy and needs, country analysis, and job analysis and description. Part B of this plan addresses such issues as cross –cultural training and support strategy. Part C of this plan evaluates the cost effectiveness of training. PART A-The Context a) Business Strategy and needs Starbucks opened its first store in China in 1999. Since then, Starbuck has opened many stores throughout the country. Starbucks’ is famous for its quality coffee. China is the best target market for Starbucks due to the rapid growth of the economy and a high population that offers the ready market for the products. In the US, Starbucks is facing a slow growth due to intense competition from other coffee shops including Dunkin‘Donuts and Caribou Coffee, and therefore, it is prudent for Starbucks to take the attractive options in China. According to Bindé, (2001), China will be the third largest consumer market throughout the globe in the near future after Japan and the US. Goals and Objectives To be the market leader in the coffee industry in China; To be the pacesetter in quality, health, safety and environment in the Chinese coffee market; To maintain a constant supply of quality coffee throughout the year. b) Country Analysis Firms wishing to expand their businesses should consider various factors, including general values, political/legal/socioeconomic situation, social institutions, standard of living and physical environment of both host and parent countries in order to determine the viability of such a move. The following provides an analysis of both the US (host country), and China (foreign country). Host Country-China China is the largest national economy in South East Asia. The country is the second largest in purchasing power parity after the United States. Economists predict that the country will become the largest national economy in the world in the next few decades (Leong & Ku, 2005). In addition, China is a political leader in South East Asia. Chinese foreign policy is based on such aspects as non-intervention by foreign countries, multilateralism and peaceful coexistence amongst individuals. The Chinese government has come up with more flexible trade policies that enable investors to operate freely. Most public utilities in China have been privatized and this enables firms to compete effectively. The country is a member of the World Trade Organization, and this plays a greater role of enhancing international trade. The country is highly populated, and therefore, there is surplus labour supply. Most businessmen in China opt for personal relationships. The country has strong laws governing intellectual property rights. Parent Country-The United States  The US, which is Starbucks’ parent country is composed of 50 states, with every state having its own representation of people and elects their own governors. The United States of America is a federal state, and people’s representation takes decisions matters to Washington. There are two main political parties in the US, which are, the Republican and the Democratic Party. The US is among the countries that have the oldest constitution in the world. The constitution, which is two hundred years old, is still in force today. However, some amendments have been made throughout the years. The freedom of expression is guaranteed in the US constitution. The US adopts the common law system, and therefore, judges are required to apply precedents to make judgments. United States is the third most populous country in the world. According to the 2010 Census, there were 308,745,538 citizens. Most citizens prefer to reside in cities and suburbs. With regards to leisure and standards of living, American Citizens are far off better than most people in various parts of the world. Research reveals that more than 1.5billion of the world’s population live in abject poverty. The US living standards are at par with other developed nations, including Japan, Australia, Germany, France and Britain. Globalization, coupled with advances in information technology, has slowly turned the world into a global village. Thus, impediments have been eliminated and free movement of goods and people have been enhanced. The US has formulated policies that enhance the country’s attractiveness to foreign firms by liberalizing trade and reduction of non-tariff barriers. Foreign firms find it easier to invest in the US due to the presence of an official language, that is, English. Also, the US encourages peaceful coexistence amongst individuals of different race, religion and color. Also, women are highly regarded and this is evidenced by their positions in high political offices (OECD n.d). C) Job Analysis and Job description Full Time Barista Position Job Outline The person will be required to prepare beverages, according to the laid down procedures and company’s policy. The successful person will be tasked with preparing or serving both hot and cold beverages such as coffee, tea and blended coffee. The person will also be tasked with cleaning and sanitizing utensils. He or she will also be required to clean seating areas. The Barista will also be required to check temperatures of equipment including freezers and refrigerators frequently to ensure that they are functioning well. The Barista will also be required to provide Starbuck’s clients with product details, including coffee preparation and blending. He or she will receive and process the payments. The person will also serve prepared dishes, including bagels and muffins. Thus, the person will be required to interact and provide the best Starbuck’s Experience for Chinese consumers. Physical Requirements: -Continuous standing/walking -Occasional climbing ladders -Frequent bending down or crawling -Occasional lifting -Constant POS Register usage -Constant bar equipment usage -Constant computer usage -Frequent flexing and rotation of spine and wrists -Constant distinguishing of flavors or quality -Constant talking and exchanging ideas Experience and Qualifications: The ideal person should have a Diploma in SCAE (Specialty Coffee Association of Europe) or equivalent coupled with more than 4 years experience working in a busy coffee store. In addition, one should have excellent customer service skills and be able to work well in a team. The person should also be a quick learner Initial Screening of Job Applicants Once the application has been made, it is expected that some of the candidates who applied may not have met the set benchmark. Therefore, the initial process will be to go through their resumes to ascertain their qualifications. This will help in reducing the number of applicants and remain with the most qualified ones who will be invited for an interview. Short listing of the applicants Once the document analysis has been completed, selected candidates will be invited for an interview with the respective line managers. It is hoped that the applicants will undergo an aptitude test first so that more can fall by the way and remain with the most suitable candidates. The other type of interview that will be administered is the unstructured interview. Under this interview, the candidates will be tested on their general knowledge of the issues. Thirdly, situational interview will be conducted to test an applicant’s ability to deal with work related issues. The top three candidates will have their names submitted to the restaurant manager who will have an opportunity to interview them and then select one to join the company. The successful candidate will know his or her fate after this interview. Offer sheet Dear candidate Offer Letter I am honored to congratulate you on being selected to join the company as a Barista. Date This Offer Letter is valid from the day you will report starting your assignment as a Barista Position: You are appointed to the position of Barista. As already discussed and agreed with you, your start date in the position will be when you report working. Remuneration: Your base salary is 10 USD per hour, which is payable once a month at month end. Benefits Annual leave: you will be entitled to a 30 calendar day’s annual leave. The company expects you to read this offer letter keenly. If you are comfortable with the terms included, sign and send a copy to us via email as soon as possible. I have agreed to the conditions of employment included in the offer letter above, on this day of , 2014. Thanks and regards HR Department Part B. Cross Cultural Training and Supports Strategy 1) Understanding cross-cultural communication Cross cultural communication is a complex and difficult experience. It brings people from different backgrounds and cultures to a platform where they can be able to share ideas and information (ZOFI, 2011). Understanding the meaning and intention of another party is a fundamental requirement for successful communication to take place. The success of cross-cultural communication is based on the success of mutual understanding, tolerance of culture and good attitude among persons involved in the communication. Globalization has turned the world into a global village where people from different backgrounds and beliefs come together to share common ideas. To a bigger extent, globalization has fostered the rise of cross-cultural communication. Communication is an important means of expressing information to a different party or individual. The cultural diversity of people causes misunderstanding in terms of communication. The means and way of communication vary from one country to another. It is important to understand the way on how to communicate and avoid miscommunications and misunderstandings. This can be achieved by knowing the aspects of different cultures. This provides the reason for cross-cultural communication as an essential exercise to be undertaken by a person visiting a foreign country and interacting across cultural boundaries. According to Bussing-Bucks (2009), Starbucks commenced its global expansion in 1996, in Japan. Due to its rapidly growing global influence, the company acquired Seattle Coffee Company of England. Today, Starbucks has more than 5200 coffee shops in 46 nations outside the US. The company’s main objective is to protect the quality of its coffee through adoption of the cultural and social norms. The company’s success in Chinese market can be attributed to the understanding of the cultural differences. Both the American culture and Chinese cultures are different. For instance, the eating and drinking habits between citizens of the two nations differs. Many people thought that Starbucks will fail in China with some arguing that the company was invading their culture, and others criticizing the Starbucks’ decision to open a store near the Lingyin Temple, which is a forbidden place. However, the company has successfully opened more than 600 coffee stores in 48 Chinese cities. The company has strived to maintain deep respect for local’s cultural as well as historical heritage (Thomson & Baden-Fuler, 2010). When the company entered China thirteen years ago, many people were skeptical that the company would not make it due to Starbuck’s nearness to Beijing's Forbidden Palace in 2001 (China Daily, 2012). In addition, Chinese are traditionally known to love tea. However, this skepticism did not stop the company from establishing coffee shops in China. The company conducted a careful market study, and in turn, introduced a Western coffee experience that captured the hearts and wallets of coffee enthusiasts. Understanding and appreciation of the local’s culture also enabled the company to break into the Chinese market. Today, people of all ages meet at Starbucks’ coffee shops to share their favorite beverage. Thus, the company has revolutionized how the locals view and drink Starbuck’s coffee. Factors affecting interpersonal communication based on cultural diversity There are many factors affecting interpersonal communication and cross-cultural communication amongst people of different cultures and backgrounds. Communication across cultures is a difficult experience because of the difference in perceptions and interpretation of messages. Effective communication is achieved when one person understands the meaning and intention of what another person is saying. The skill to associate with rewarding and effective cross-cultural communication seems to be elusive to many people who do not have experience of this form of interaction. There are various reasons why interpersonal communications do not work. In many instances, the message may not be perceived exactly the way the sender intended it (Ting-Toomey, 2012). According to Tang & Ward, (2003), Chinese lives in societies that are collectivist in nature. The employee, on the other hand, comes from the Western World that is individualistic in nature. This difference has the potential to cause potential misunderstandings, and consequently, miscommunication between the clients and the employee. The following factors affecting interpersonal communication provide a broader sense of cross-cultural communication in the face of globalization. Differences in mentality The psychological state of the message recipient may influence how the message is received. If an individual has personal worries, they may be preoccupied with personal problems and distress and be non-receptive to the message than if they were not. The attitude of the receiver of a message is also a significant barrier to interpersonal communications. Attitudinal barriers may occur because of personality conflicts, resistance to change, poor management, or lack of motivation. Effective recipients of messages should attempt to triumph over their own attitudinal obstacles to enhance effective communication. There are few striking dissimilarities in mentality between the Western World and China. The traditional Chinese culture is based on the following key aspects: self-sufficient natural economy, feudal imperial power, Confucian ethics and patriarchal system. The self-sufficient natural economy that dominates the agricultural sector leads to stubbornness. The feudal imperial power affects the Chinese social mentality in that; a unique authoritarian character is produced. The patriarchal family system causes the Chinese citizens to lack interest in general affairs, and in turn, focus on to ethical relations. Thus, one may sacrifice his or her family members for oneself. Lastly, the social structure, also known as Confucian ethics advocates for a patriarchal family system whereby everyone is expected to lead a simple life irrespective of his or her wealth. China has a great educational system, but it lacks soundness and creativity. For instance, Chinese memorizes on almost everything, and therefore, they stagnate on many instances. This ‘Chinese way’ implies that people do not know what is happening beyond their borders. In today’s world, the Chinese are lagging behind other societies. Language and Communication problems The language and linguistic technicalities may act as a barrier to interpersonal communication. A person communicating one language may use a terminology which may act as a barrier to interpersonal communication if not well understood. If a person uses many jargons and abbreviations in his or her message, the recipient may not be able to understand the message that is not familiar with the terminology used. The presence of regional colloquialisms and expressions in many cultures may be misinterpreted by the receiver. In addition, it can be considered to be offensive. Cross-cultural communication is challenged with many communication breakdowns by individuals communicating. This breakdown starts with the perception of the message being given by one of the parties in the communication. Perception is the way a person interprets and understands the reality. A different understanding of the information may occur because of listening to the small amount, or part of the message that the sender is giving. A different perception also may spring out of selective listening. An individual may listen to part of the message and ignore the rest of the message. Communication is made easier and attractive when there is a common and understandable topic to be discussed. When an individual misses out a common issue, he or she may not be able to pass the information effectively. Additionally, there is a need to have a fundamental or primary word of communication that is well understood. The problem of language diversity by Chinese generates a barrier to cross-cultural communication. Foreign language deficit brings many challenges to interpersonal communication among individuals. There is a lack of linguistic competence in China, and individuals strive to speak correctly and to understand another’s mother tongue. The lack of appropriate competence cause adverse barrier to interpersonal communication across different cultures. 2) Cross-cultural support Cross cultural training will provide the international assignee with the cultural competence. Thus, cultural awareness and understanding will enable the employee to interact efficiently and effectively with the Chinese people. In order to overcome the above barriers, the Barista will need training on the following areas; A need for training on effective interpersonal communication skills Interpersonal communication is the process through which people exchange feelings and information using verbal and nonverbal messages. It does not only focus on the actual message, but also the nonverbal messages gotten from gestures, body language and facial expressions, the language used and how the actual message is said. Communication happens when two or more people are aware of each other even when there is no speech. Therefore, the employee to be sent to China will be required to have effective interpersonal skills to avoid sending the wrong messages. To achieve this, the employee will be required to practice interpersonal skills. Research shows that the effectiveness of interpersonal communication depends on the degree to which we practice and demonstrate interpersonal skills. The employee will require training on interpersonal skills in order to co-exist well with the Chinese who have different culture. Solution to emotional Barriers The Barista should be trained on how communication skills, including how to boost his self-confidence. A person communicating should have full confidence in what he or she is saying. By being confident in what a person speaks and believing in himself or herself, he or she will be able to communicate clearly without being over involved in emotions. Solutions to language barrier When two cultures clash in a community or an organization, it is important to identify a common ground to work from. The employee will face problems while interacting with the Chinese consumers as a result of cultural barriers. Therefore, the employee will need training on how to pass information effectively. The Starbucks employee will be advised to avoid the use of jargons and technical words when speaking with someone outside the industry. The importance of communication is for the message being passed to be understood without causing misconceptions and misinterpretations. Solutions to self esteem barriers The cure to self-esteem barriers in communication is the communication itself. By engaging with others, a person will be able to learn their real strengths and weaknesses. Communication is a two-way-traffic where two individuals must understand the message. In order to achieve this, the Barista will be encouraged to share ideas with colleagues and customers. PART C: Cost Effectiveness The effectiveness of training will be determined on the following; Improved communication with clients Improved communication with other Starbucks’ staff Improved productivity Employee’s ability to build effective partnerships across cultures Reduction in linguistic barriers Respect toward leadership Understanding of instructions and explanations Today’s marketplace has forced organizations to relocate their employees to other nations in order to establish their operations abroad (Kathawala, 2005). Most international assignees are chosen based on their skills and qualifications. They are, therefore, presumed that if they can do it in their native country, they can do it in a foreign country, as well. However, studies conducted so far indicates that this is not the case because there exists cross-cultural differences that make their skills and qualifications obsolete in foreign locations. Therefore, enhancing the international assignee’s success in a foreign nation through cross-cultural training should be the priority for human resource managers. If the Starbucks’ employee is sent to China and fails to work effectively, the whole venture will, therefore, be costly on the part of the company. International assignees fail to settle into their new location or perform their duties effectively due to cross cultural differences. The culture shock as a result of relocation, can affect the Barista, and his or her family if not well managed. An international assignee may find it extremely hard to gel or share ideas with his or her new workmates. An organization, therefore, has the role of retaining its staff members after investing too much finance and time in recruiting and training them. With this regard, organizations must constantly motivate their staff members if they aim at maintaining them. As such, the organization must administer proper training to the international assignees, and failure to do so may contribute to damaged relationships with customers. Evidently, the benefits of cross-cultural training far outweigh the costs. Training enhances the employee’s probability of accomplishing his or her tasks effectively in the new foreign location. It also enables the employee to understand the customs of others. Also, it reduces culture shock, and enhances better communication and partnerships (Carter, Ulrich & Goldsmith, 2004). Conclusion Cross-cultural training will enable the employee to perform his or her tasks effectively. The training will enable the employee to socialize well with the Chinese consumers. Recent research indicates that the success of cross-cultural training heavily depends on the support of the parent country. Therefore, the HR manager at Starbucks’ headquarters is expected to provide the necessary learning materials and training tools. The human resource manager at Starbucks will also be required to design specific training and development programs to ensure that the employee adapts well to his or her new context. This will also play a critical role in reducing ethnocentric orientations. In addition, it will enable the full integration of the new county and Starbuck’s settings. References Bindé, J. (2001). Keys to the 21st Century. New York (NY): Berghahn Books. Bussing-Bucks, M. (2009). Starbucks. California: ABC-CLIO. Carter, L, Ulrich, D & Goldsmith, M. (2004). Best Practices in Leadership Development and Organization Change: How the Best Companies Ensure Meaningful Change and Sustainable Leadership. New York (NY). John Wiley & Sons. China Daily (2012). Starbucks near Buddhist temple triggers debate< http://www.chinadaily.com.cn/china/2012-09/24/content_15779426.htm> Kathawala, Y. (2005). Global outsourcing and its impacts on organizations: problems and issues: Int. J. Services Operations Management, Vol. 1, N0. 2 < http://www.ux1.eiu.edu/~cfyak/Articles/global%20outsourcing.pdf.> Leong, H.K. & Ku, S.C. (2005). China and Southeast Asia: Global Changes and Regional Challenges. Singapore: Institute of Southeast Asian Studies. OECD. (n.d). Programme For International Student Assessment (PISA) Results from PISA 2012 problem Solving < www.oecd.org/unitedstates/PISA-2012-PS-results-eng-USA.pdf> Starbucks. (2011). Starbucks Company Profile. < http://globalassets.starbucks.com/assets/F62C45CD8A8B4699BEFC60A2618F0431.pdf.> Tang, J & Ward, A. (2003). The Changing Face of Chinese Management. London: Psychology Press. Thomson, N & Baden-Fuler, C. (2010). Basic Strategy in Context: European text and cases. New York (NY): John Wiley & Sons. Ting-Toomey, S. (2012). Communicating Across Cultures. New York (NY): Guilford Press. Wang, H. (2012). Five Things Starbucks Did to Get China Right< http://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/> ZOFI, Y. (2011). A Manager's Guide to Virtual Teams. AMACOM Div American Mgmt Assn. Read More