Patchwork Analysis of Starbucks - Assignment Example

Patchwork analysis of Starbucks Patch 1 Company Overview The Starbucks Company, founded in 1971,was a small coffee company. In the initial days, the Starbucks Company focused on roasting and retailing whole bean and ground coffee as well as tea and other spices. The company had a single sore located in Seattle in Washington. Over the years, the company has registered an immense growth and expanded both locally and internationally. The Starbucks Company now has customers from more than 65 countries in the globe. IntheUnited States, the company has registered the greatest impact and has established a renowned reputation as one of the leading coffee companies. Starbucks Company has managed to establish a unique brand, which has been one of its greatest assets. The mission of Starbucks Company is to provide an inspiration to the human spirit through one person, a single cup, and one neighbourhood. This mission illustrates Starbucks’ commitment to give all its customers an outstanding experience (Starbucks Coffee 2008, p. 1). The company believes in offering the best coffee to its customers. It has established positive relationships with suppliers of coffee beans from across the globe. These relationships with suppliers serve to ensure that the Starbucks Company receives coffee of the highest available quality and sourcing coffee types that promote environmental sustainability. The Starbucks Company has established a habit of sending its coffee buyers to local farms in Latin America, Asia, and Africa to buy the coffee directly. This gives the coffee buyers an opportunity to select the coffee beans of the highest quality. The Starbucks Company works with master rosters that have the potential to strike a balance of rich flavour, experienced in every single cup served at Starbucks. The method of roasting has become one of the signature tastes of Starbucks. According to March 2014 statistics, the Starbucks Company had over 20,000 storesglobally. This is because the company has made efforts of extensive expansion both on the local and global fronts. The purpose of Starbucks’ expansion has been to ensure that its unique experience is present in different countries. The company has focused on establishing both company owned stores as well as franchised stores. According to the statistics released in the first quarter of 2014, Starbucks has 10125 company owned stores. At the same time, the company had acquired 10394 franchised stores. Therefore, the above means that, the Starbucks Company enjoys remarkable revenue from the company owned stores whose 100% profit goes to the company (Starbucks Coffee 2008, p. 1). The percentage of the royalty fees paid from the franchised stores has also served to increase the profit margins of the company. More precisely, the company operates under a target of establishing three new stores each single day. The Starbucks Company has ventured into regions such as Europe, the Asia pacific region, Canada, as well as Latin America. Notably, the company enjoys market leadership in the home country where it was established. Evidently, Starbucks Company has a plan of expanding further, especiallyin the emerging markets available in the Asia Pacific region. Starbucks Company has a range of products served in its stores. As highlighted above, coffee is one of the main products, with the company selling over 30 blends as well as single origin premium coffee products. The company also offers handcrafted beverages such as Frappuccino, fresh brewed coffee, Starbucks refreshers, hot and iced espresso beverage, smoothies and different types of teas (Starbucks Coffee 2008, p. 1). Starbucks Company has also ventured into merchandise specializing in products such as equipment used to brew coffee and tea, packaged goods, mugs, accessories, music, books and gifts. Recently, the company has also ventured into offering fresh foods such as sandwiches, salads, fruit cups, oatmeal, and baked pastries. The Starbucks Company also specializes in consumer products specifically coffee and tea. These are available in packs such as Tazo tea filter bags, Starbucks-k-cups portion packs, Starbucks via ready brew, and teavanner verismo pods (Mansor&Tayib2013, p. 2). Other consumer product include ready to drink products such as bottled, Frappuccino, Starbucks iced coffee, Starbucks, doubleshot energy drinks, evolution fresh bottled juices, and juiced teas. Starbucks Company has about 182, 000 employees, regarded by the organization as their esteemed partners. This is because Starbucks employees are of critical importance in delivering the Starbucks experience to its customers. There are both full time and part time partners with different compensation packages. This paper will carry out a patchwork analysis of the organizational structure and architecture as well as the use of content theories in motivating the employees. The main purpose of considering the Starbucks Company organizational structure is because the company has exhibited a tendency of adjusting to environmental changes by redesigning its structure. Over the years, the company has expanded to different regions of the globe. The rapid expansion has introduced emerging needs and new organizational structures. The top executive team of the company has often made adjustments in Starbucks Company organizational structure in an effort to suit the emerging customer and market needs. This patchwork analysis will consider critically the current organizational structure of the company in relation to the organizational culture theories. In addition, the patchwork will analyse the current structure of the organization critically. In addition, a critical consideration of employee motivation in the Starbucks Company is important (Mansor&Tayib2013, p. 6). This is because the company considers human capital as one of its most critical assets. Therefore, the company regards employees as partners in an effort to exhibit the integral role they play. Evidently, the company has motivational strategies used to motivate employees so that they can register remarkable performance. This patchwork analysis will consider the motivational strategies used by the Starbucks Company in relation to content theories. Analysing the organizational structure of Starbucks Company as well as the employee motivation strategies is of critical importance because the future of the company depends on its ability to adjust its organizational structure in order to improve the efficiency. Moreover, employees form the critical link between the organization and the customers. Therefore, they are of critical importance in determining the level of customer satisfaction. Evidently, customer service and customer satisfaction have a direct impact on the performance of the organisation (Starbucks Coffee 2008, p. 1). The Starbucks Company has exhibited its commitment to develop strategies of motivating and retaining employees who are significant partners to its business. These reasons justify the discussion of these issues in this patchwork analysis. Patch 2 Organizational Structure and Architecture The organizational structure is of critical importance in any company. This is because the structure determines the hierarchy of responsibilities as well as the existing levels of communication. There is evidence that organizational structure affects a company’s performance. This is because organizations with poor structures exhibit poor channels of communication and the breakdown in communication eventually lead to inefficiency. However, when an organization has an effective structure, there are well structured communication channels that promote efficiency (Starbucks Coffee 2008, p. 1). It is important for companies to be able to design an organizational culture that can address all their needs. Different organizational structures have been described by theorists and are suitable for different types of organizations. Organizational structure also determines the decision-making processes as well as the level of control exerted by managers in different positions. In the contemporary world, organizations have adopted contemporary approaches to organizational structures. One of the prominent modern organizational theories is the systems approach (Mansor&Tayib2013, p. 11). The systems approach views an organization as an open system. The context of a system in this theory translates to the fact that the organization comprises of several interrelated elements. Just as the elements in any other system prove to be interdependent, elements making up an organization are also highly dependent on each other. The open system approach has received much appraisal in therecent past because it described how organizations form structures that can respond effectively to the changes in the environment. Notably, the business environment is subject to different internal and external changes. Organizational structures that are open are able to recognize changes and exhibit responses to those changes. Therefore, the open system approach presents several open boundaries that give space for feedback mechanisms within and without the business. Therefore, an organization with an open system can exert a measure of control to both its external and internal environment. Open systems do not exhibit unnecessary rigidity. On the contrary, the open systems approach recognizes that the business world is highly dynamic and that multiple factors from within and without the company can affect its performance. Therefore, open systems allow space for vigilance of all changes in the internal and external environments. Most importantly, open systems are considerate of customer needs and the reactions in the market. Organizations with an open system have the potential to reorganize themselves in an effort to satisfy the customer needs and meet their expectations. In addition, open systems allow the organization to develop different ways of accomplishing goals. This is because there is a high level of flexibility within an open system. An open system approach in organizational structure promotes high levels of efficiency and gives proper regard to human values (Mansor&Tayib2013, p. 14). Moreover, an open system is only successful if all the subsystems exhibit proper coordination. In the case of the Starbucks Company, the open systems approach has been evident over the years. This is because the company has been keen to note emerging needs in accordance with internal and external environments and has often reorganized itself in order to promote efficiency. A clear case is what happened in 2011. The chief executive officer of the company Howard Schultz highlighted that the company needed to reorganize its structure in an effort to meet the emerging needs resulting from the company’s global growth strategy. As highlighted above, Starbucks Company is committed to a rapid global expansion strategy. After the global recession, the company exhibited remarkable grown and positioned itself effectively to seize international opportunities(Starbucks Coffee 2008, p. 1). This necessitated a structural reorganization. Evidently, this is in response to the open systems approach, which considers the environmental influences on a company’s structure. During this time, the Starbucks Company recognised that the external environments governed by its global expansion demanded the company to adapt its structure to the emerging market needs. The sole purpose of the reorganization was to promote both efficiency and effectiveness. Prior to the reorganization, the top executive team of the companywas based in Seattle in Washington. With the rapid global expansion, it was becoming impossible for the team based in Seattle to oversee all the activities in the emerging markets. This explains why the Starbucks Company adopted a three region organizational structure. The new structure comprised of the china and Asia Pacific region, the Americas, and the capital EMEA, which represented Europe, United Kingdom, Middle East, Russia, and Africa. The Americas region covered the markets in the United States, Mexico, Latin America, and Canada (Mansor&Tayib2013, p. 17). This reorganization resulted in new positions for three presidents who would head the three regions. The reorganization process identified potential candidates who had been working with Starbucks Company and who had the relevant experience to take the lead in the different regions. The Starbucks Company recognized the need to adapt to the changes in the international coffee business. Evidently, the company had identified potential international opportunities and this regional reorganization placed it in a better position to exploit the new markets. In addition to the reorganization of the structure, the company would also change its strategies to match the new structure in its effort to achieve its goals of becoming a multibillion business. In addition, the Starbucks Company has been keen to recognize the emerging needs to integrate its business strategy with the corporate social responsibility strategy. This explains why the company introduced a CSR position in its structure in an effort to respond to the needs of its stakeholders effectively. With the increasing global expansion, the company has also undertaken a decentralization move in an effort to give managers an opportunity to participate effectively in decision-making. This is because in each Starbucks store, there is a chief manager who controls the stores activities. Under the chief manager, there are shift supervisors and employees commonly referred to as baristas. The purpose of decentralization was to ensure that store managers were in a position to make critical decisions regarding their stores. Notably, the Starbucks Company has other functional units, which work together in an effort to achieve the company’s goals (Mansor&Tayib2013, p. 13). The fact that the company responds to both the internal and external changes exhibits its commitment to an open system’s approach. Content Theories about Motivation Employee motivation is a critical aspect considered by any organization that intents to register remarkable performance. Without doubt, employees represent the most critical resource for the organization. Many organizations have adopted different content theories in an effort to motivate employees effectively(Taormina &Gao2013, p. 155). Content theories consider the factors that motivate people. Therefore, content theories give special focus on the needs and goals of the employees. Two of the most renowned content theories are the Maslow’s hierarchy of needs and Herzberg’s Two Factor Theory. According to Maslow’s hierarchy of needs, the successful satisfaction of needs does not exhibit any observable change in behaviour. However, the lack of satisfaction of a certain need contributes to behavioural change. This means that when a need is left unsatisfied, it becomes a potential motivator. Abraham Maslow highlighted five different levels of needs. In the first level, he identified physiological needs, which comprise of the most basic human needs. These are namely oxygen, water, and food. Evidently, unless these needs are satisfied, human survival is impossible. The second levels of needs identified by Maslow are the safety needs. These include need such as personal wellbeing, health, workplace safety, and personal security. In the third level, Maslow highlighted the belonging needs. The third level deals with needs such as relationships, families, as well as different types of friendships that enable individuals to experience a sense of belonging and acceptance(Taormina &Gao2013, p. 155). The fourth level comprises of the self-esteem needs, which are primarily self-respect, and other achievement needs. The highest level comprises of self-actualization needs. This is the topmost human needs, which cannot be fully satisfied. Self-actualization is a precondition to the recognition of an individual’s entire potential. In the specific case of the Starbucks Company, there are different strategies adopted to satisfy the different levels of employee needs in an effort to motivate them. The provision of physiological needs such as food and water is evident through proper compensation and a favourable working environment. Regular pay for Starbucks employees enables them to access basic commodities such as food and water, whereas favourable environment ensures that they have a supply of oxygen during their working hours. The Starbucks Company does not take for granted these physiological needs for the staff because they are of critical importance to human survival. The second level of needs comprises of several safety needs. In order to motivate employees with a sense of personal security, the Starbucks Companyoffers secure employment. The employees do not live with an the fear of losing their jobs. This allows them to focus on delivering quality customer service in all the stores. Moreover, the company ensures that Starbucks coffee houses follow all the health and safety regulations, a factor that promotes safety within the workplace. In addition, the company has an established pension scheme,whichgives employees a measure of security for the future(Taormina &Gao2013, p. 155). Without doubt, these factors are of critical importance in motivating the Starbucks employees and ensuring that they deliver their best. The company also takes into consideration the social needs of the employees. The fact that the company regards employees as partners gives them a measure of acceptance and a sense of belonging to the organization. In addition, the Starbucks Company encourages teamwork, which promotes successful socialization. The company has regulated working hours presenting the employees with an opportunity to spend time with families and friends (Mansor&Tayib2013, p. 26). In cases whereby an employee spent more than 20 hours per week at work, there is a rewarding compensation both for the full time and part time employees. This ensures that the social needs of employees at Starbucks Company are met successfully. The Starbucks Company has also taken consideration in fulfilling the self-esteem needs of the employees. Evidently, employees in different positions respect each other. Moreover, employees have titles suchas partners and barista a factor that indicates the integral value they have within the organization. This makes them experience a sense of appreciation as well as develop self-confidence. Starbucks Company has feedback systems between managers and employees. These feedback systems promote positive working relationships and make the employees feel appreciated. This creates a positive environment for increasing self-esteem, which results to a higher performance. As mentioned above, self-actualization is the most critical human need. The satisfaction of the needs in the lower levels presents an individual with an opportunity to discover ones full potential. However, companies need to empower employees towards self-actualization. The Starbucks Company excels in this sector. They provide employees with extensive training on customer service, workshops, as well as presenting them with an opportunity to acquire college degrees. Employees receive the required support to undergo a successful career progression(Taormina &Gao2013, p. 155). These opportunities present employees with the required support towards self-actualization. Evidently, the Starbucks Company has some of its employees achieving self-actualization and a measure of personal fulfilment. This explains why they deliver exemplary customer service and are able to move up the career the progression ladder. In accordance with the Herzberg’s two factor theory, organizations need to present employees with motivators, which are intrinsic factors that serve to motivate an individual. These include achievement, recognition, responsibility, and personal growth. In addition, employees should provide hygiene factors, which prevent dissatisfaction among employees. Hygiene factors are primarily extrinsic and include job security, working conditions, as well as salary or remuneration. The Starbucks Company has taken both of these factors into consideration in an effort to motivate employees. The company presents employees with motivators. Managers exhibit their concern about the level of satisfaction that employees feel towards their job responsibilities(Valančienė&Gimžauskienė2008, p. 82). In addition, they recognize employee achievement and have a proper reward system for high achievers. Moreover, the existence of feedback systems within the Starbucks organization makes the employees more motivated as they can raise their issues and make inquiries about their tasks. Feedback systems also make the work more interesting and meaningful. Empowerment systems such as training offered by the Starbucks Company to the employees promote personal growth and advancement. This prepares employees for new responsibilities within the organization ('Starbucks Corporation SWOT Analysis' 2014, p. 3). Without doubt, the Starbucks Company takes measures to ensure that employees have motivators that can propel them to better performance. On the other hand, the company ensures proper consideration of hygiene factors, by establishing rewarding salary packages and benefit schemes, proper working conditions, shift allowances, as well as job security. Decentralization in the organization has served to ensure that employees have proper working relationships with their supervisors. These factors reduce the levels of dissatisfaction among the employees, prompting them to focus on increasing their performance rates (Valančienė&Gimžauskienė2008, p. 79). Patch 3 Case Summary and Recommendations The issue of organizational structure and architecture discussed above is of critical importance to the Starbucks Company. As mentioned previously, effective organizational structure can propel an organization to higher productivity. On the contrary, poor organizational structures limit an organization’s performance. Organizational theories developed in the past focused on describing different structures that an organization can adopt in accordance with its needs. However, it emerges that modern approaches to organizational theories are more applicable to the Starbucks Company. More specifically, the open systems approach is an effective model for a company like Starbucks, which indulges in a rapid expansion strategy. The open systems approach ensures that a company establishes feedback systems within the internal and external environments in an effort to recognize signals for change and respond effectively('Starbucks Corporation SWOT Analysis' 2014, p. 6). Open systems do not exhibit rigidity, but are rather flexible and can adapt to the changing environment. The 21st century business front is highly competitive and dynamic. Businesses cannot afford to maintain a rigid organizational structure. The Starbucks Company seems to have realized the value of maintaining an open system organizational structure. This is because it has been able to respond positively to changes within and without the organization. One of the evident cases explained above is the reorganization that took place in 2011. Upon the realization that global expansion presented new managerial duties and responsibilities in different regions, the company introduced a regional structure. The assigning of a president to each region was a move towards decentralization. This presented the three presidents with decision-making powers on the progress of their regions. The company has exhibited decentralization to obtain a flat structure in other functional units. With the modern emphasis on the purpose of corporate social responsibility strategies, the company introduced a CSR department in its structure. This means that the company can positively respond to market conditions, customer needs as well as its internal needs. This explains why the company has exhibited reorganization efforts in the past. Evidently, the current organizational structure for the Starbucks Company seems to be effective('Starbucks Corporation SWOT Analysis' 2014, p. 8). However, through the open systems approach, the company can make reorganization efforts in the future in response to any changes either within or without the organization. On the other hand, employee motivation deserves a priority in the modern day business world. This comes after the realization that human capital is of critical importance to the success of any business. Psychologists have been trying to understand the factors that motivate employees towards a better performance. Abraham Maslow’s of hierarchy of needs presents five different levels of human needs in a triangle. Physiological needs at the lowest part of the triangle represent the basic human needs (Taormina &Gao2013, p. 155). Providing employees with the basic human needs may not motivate them toregister a better performance. The Starbucks Company seems to have recognized the value of employee motivation. In addition, it has been making efforts of satisfying other needs of employees such as safety needs, social and self-esteem needs, as well as self-fulfilment needs. The company has achieved this through the promotion of favourable working conditions, provision of job security, and safe workplaces. Teamwork within the organization satisfies the social needs of the employees('Starbucks Corporation SWOT Analysis' 2014, p. 10). Moreover, the working hours required by the organization leaves employees with time for family and friends. The company also satisfies the self-esteem of the employees by ensuring that employees in different ranks respect each other. Since the company regards them as partners, their worth within the organization is promoted. Training programs and further education empower employees towards self-actualization. Evidently, the Starbucks Company can engage in human capital development strategies that will enable employees to be more self-actualized(Taormina &Gao2013, p. 155). In accordance with the Herzberg’s two factor theory, the Starbucks Company provides both motivators and hygiene factors. The motivators described above represent intrinsic factors that promote job satisfaction. On the other hand, the hygiene factors reduce the satisfaction levels. The Starbucks Company recognizes the achievement levels of its employees and ensures that their work is meaningful. Proper training on the job responsibilities helps the employees’ complete tasks successfully and experience a sense of achievement. With the company’s remarkable growth in the recent past, the organization has recognized employees as the most reliable partners for such success('Starbucks Corporation SWOT Analysis' 2014, p. 12). With the current efforts of providing employees with advanced education, it is evident that employees will exhibit higher levels of motivation. In order to reduce dissatisfaction, the company operates under favourable policies rewarding remuneration schemes, pension schemes, and favourable working conditions. Recommendations Evidently, the Starbucks Company can adjust itself to the emerging market and customer needs in the future. Although the company has made decentralization efforts, it has room for further decentralization in an effort to ensure that managers in each store have a remarkable span of control and can participate in the decision making process. Further decentralization will present employees with an opportunity to participate in the decision making process. Since employees are in the direct conduct with customers, their contribution to decision making will be of significance. Under each of the established regional units, the company needs to establish other functional units such as human resources, finances, marketing team, and corporate social responsibility(Valančienė&Gimžauskienė2008, p. 87). This will make the regional departments function effectively within the assigned markets. As more stores open in some markets, the company may split into more regions in the future. In all its endeavours of reorganizing the structure, the Starbucks Company should stick to promote efficiency. The Starbucks Company can adopt more motivational strategies that can promote self-actualization among employees. Theorists have highlighted that self-actualized employees exhibit the highest level of performance. Self-actualization should present employees with an opportunity to utilize their creativity. In the future, the Starbucks Company should consider doing away with stringent instruction deliver to employees and consider empowering them to use their creativity and deliver quality customer service. Allowing employees to make such critical contribution will require more investment in human capital development(Valančienė&Gimžauskienė2008, p. 83). The company should design more programs of empowering the employees in an effort to promote productivity. Providing better remuneration packages will also be an effective move towards the employee motivation. Bibliography Mansor, M, &Tayib, M 2013, 'Integrated and Open Systems Model: An Innovative Approach to Tax Administration Performance Management', Innovation Journal, 18, 3, pp. 1-29, Business Source Complete, EBSCOhost, viewed 5 January 2015. Starbucks Coffee, C 2008, 'Starbucks Announces New Leadership Structure to Accelerate Global Growth', Business Wire (English), November, Points of View Reference Center, EBSCOhost, viewed 5 January 2015. 'Starbucks Corporation SWOT Analysis' 2014, Starbucks Corporation SWOT Analysis, pp. 1-12, Business Source Complete, EBSCOhost, viewed 5 January 2015. Taormina, R, &Gao, J 2013, 'Maslow and the Motivation Hierarchy: Measuring Satisfaction of the Needs', The American Journal of Psychology, 2, p. 155, JSTOR Journals, EBSCOhost, viewed 5 January 2015. Valančienė, L., &Gimžauskienė, E. (2008).Dimensions of Open System in Performance Measurement: Theoretical Aspect.Economics & Management, 79-87. Read More