Management for the Service Sector - Essay Example

Running Head: MANAGEMENT FOR THE SERVICE SECTOR Management For The Service Sector s Management For The Service Sector Company Overview Starbucks at first started off as a single store in Seattle. At present, in an astonishing short period of time, Starbucks has expanded about 4,000 stores world wide. This not only made an extremely flourishing business, nevertheless also started what is currently a part of American life. Ever since the beginning, Starbuck’s founder as well as CEO Howard Schultz sought to make a different sort of company. He wanted Starbucks to put the needs of its employees, customers, and community first. Management: Employee and Customer Satisfaction Starbuck’s management continues to establish and cultivate winning strategies for the company. One of the best decisions recently made for the company, was its approach to do without franchisees and keep its stores company owned. The depth of management resources is what makes Starbucks different from small businesses. There are other similar companies that will spend up to approximately $300 million dollars per year, just in marketing, where as Starbucks will only spend 1 percent of its revenues (approximately $30 million) in both advertising and marketing. Starbucks utilizes their marketing and advertising dollars towards new products that are ready to come out or new coffee flavors and ideas. Starbucks has no doubt that their employees are one of their most important assets to the company. Their workforce is able to manage and maintain a competitive advantage. Pride in their workforce was produced through an empowering corporate culture; outstanding employee benefits and employee stock ownership programs. Being able to make decisions on their own without first having to report to management is empowering and motivating for the employees. They are encouraged to think for themselves as an entity of the business. Your mind unconsciously filters our most of what is going on around you. At some level of perception, your mind is aware of certain things. Perception is a persons mental image of the world. One of Starbucks biggest concerns is with customers perception. The customers perception of the way employees behave, greet them and even the way that handle their money has a lot to do with getting them to buy a $3.00 cup of coffee (Schultz & Dori 1997 p 14). One of the great challenges Starbucks faces is to create a perception of quality in order to get customers to pay the price they want charge. For many people, a brand is perception. People perceive Starbucks to be a great place to sit down in a comfortable, relaxing atmosphere. The perception, leading to the experience, provides customers with an unforgettable experience Major part of communicating effectively is the ability to resolve conflicts. When we deal with conflict in a respectful way instead of ignoring or avoiding it, we build new ideas and concepts in the organization (Burka 2005 p 98). As mentioned previously, since Starbucks is an international company, it is important for management to be trained in conflict resolution and diversity. When conflict arises, starbuck’s management looks at the source of the conflict without assigning blame or assuming the worst. They examine each persons understanding of the objective they are trying to reach and ensure if hey are all in agreement as to the goal they are working towards. They make sure that their employees have a complete understanding of the responsibility in regards to the objective. And lastly, they make sure there is no misunderstanding about the tasks required for each employees in order to carry out the responsibility. As Starbucks an international organization, management always highlights the fat that negotiating styles evidently differ among national cultures. Following what Starbucks management does to make it’s in negotiating effective: *Research Your Opponent *Begin with a Positive Overture *Address the Problem *Pay Little Attention to Initial Offers *Emphasize Win-Win Solutions *Create and Open and Trusting Climate An effective team requires a diversity of skills and roles. Management of Starbucks realizes that an effective team depends on its leader. Their managers always keep in mind that a successful team leader is a team member who initiates actions, suggests instructions and offers information as well as opinions. The characteristics of effective teams are what are focused by management members of Starbucks. Their management a clear unity of purpose and the team needs to be self-conscious about its own operations. The Management helps their teams set clear and demanding performance goals, the atmosphere is informal, comfortable and relaxed (Cohen 1993 p 23). The management has open discussions in which everyone participates and is encouraged so that the employees continue to feel free in expressing their feelings and ideas. The management has great leadership skills as leaders should welcome others ideas while expressing their own, should be receptive to others ideas and gives verbal and non-verbal feedback and that’s what they welcome from customers as well as employees. They believe in the Share success with the people who make it happen concept as they believe that it makes employees think like an owner, which assist them in building long-term relationships with customers and influences employees to do things in an efficient way. Stars bucks believe in group decision-making techniques are prevalent in the way their partners by allowing them to have a voice in the selection process of new partners In creating high performance teams, they fee it is important to encompass a sense of enthusiasm. Teams that are high performing are the structure blocks of high performing organizations. Employees must love what they do and feel cared about by the organization. Starbucks managers and team leaders have to continue to regenerate the passion to help keep productivity and motivation alive. Every company must stand for something. Starbucks stood not only for good coffee, but specifically for the dark-roasted flavor profile that the founders were passionate about. Leadership is just one of the countless resources that successful managers at starbucks possess. The two concepts are different and care should be taken to distinguish between the two. The main objective of their managers is to maximize the success and productivity of the starbucks by planning, organizing, directing and controlling. The loyalty of Starbucks partners is second to none. Loyalty is an important employee asset of Starbucks. Employees are likely to display increased loyalty and support for the companys objectives when they feel wanted and support from management. Starbucks makes the basis of its dedication to its employees in its mission statement. "At Starbucks, being truly committed to our core values means holding one another accountable for our actions. Through Mission Review, partners are encouraged to voice opinions about whether or not company practices are consistent with our Mission Statement and Guiding Principles. When our partners send their comments or questions to our Mission Review Team, they are connected to the right person for a response. The process is monitored, and partners concerns are shared with Starbucks leaders." (http://www.starbucks.com/aboutus/CSR_Final.pdf. 4) Part-time employees from the community are able to measure the citizenship of Starbucks be being able to "co-pay" when going to the doctor instead of paying over one hundred dollars for an office visit. Starbucks also works jointly with coffee farms in social development projects such as water system improvements and the building of health clinics, schools and coffee mills. In addition to its commitment to coffee producing countries, Starbucks also invests in local communities through volunteers, financial contributions and literacy grants. Communities can be proud that through the companys volunteer program, Make Your Mark , Starbucks provided a financial contribution of $1.1 million to various non-profit organizations across the United States and Canada in support of the 200,709 hours volunteered by partners, customers their friends and family. (www.business-ethics.com) Starbucks offers a wide variety of opportunities and benefits to its partners. Employees are making careers at Starbucks which allows them to pick which store they want to be apart of since new stores continue to open at the rate of three to five every week. Starbucks Management focused on work-group productivity areas in need to empower employees to make decisions without management referral or input and management encourages employees to think of themselves as part of the business. Starbucks has no hierarchical organizational structure at all and they have no official organizational chart as well. This is an excellent base foundation for Starbucks and allows employees to take pride in their jobs and helps support a low turnover rate. Better person-to-person communication and collaboration will lead to better workgroup productivity. Though initial skeptics where dubious regarding the products breakthrough success, customers found the price a small drawback next to great service and friendly ambiance and gladly cashed out upwards of a dollar for a single cup of coffee. The product line was simultaneously evolved, with a new warm beverage hitting stores at least once every holiday season. Over the years, the management has managed to make Starbucks experience one that is adopted by a far wider range of customers than the initial upscale 25-44 female white collar coffee lover. This is in part due to Starbucks universal appeal, since the soothing atmosphere provides a safe haven for anyone wanting to take a break. Also, the vast range of beverages paired with the high-level of customization gives way to a mind-boggling variety, served fresh on location and available to suit almost anyones taste. As a result, sales of beverages have escalated to 77% of total sales while a decade earlier the distribution was equal to that of coffee bean (Joseph 2006 p17). It can be said that because of the environment which the management has made It can be said that in Metropolises and large cities people find a fast-serving starbucks extremely appealing, as large crowds and rush hours demand convenient service, and for many customers is a prerequisite to their visiting places (Robbins 2003 p 23). In places that are not of central or key location, fast service might not be ranked as highly as friendliness of staff, and customers might also spend a longer time in a store than one on the way to the office. Furthermore, it can be safe to assume that in areas or seasons where or when it is cooler, a warm cup of coffee or other beverage might be especially inviting, more than somewhere where it is unusually warm year-round. In order to keep customer loyalty high the management made Recent developments in coffee-brewing resulted in machines such as the Nespresso, Senseo or Illy cafe; which allow consumers to make espressos quickly and efficiently. They deliver high quality (at least in the case of ones like Nespresso) single-portion pellet coffee, comparable to that received from an espresso machine in a coffee shop. Although this will probably not affect the sales of coffee shops drastically, it can start a trend where offices purchasing such machines will have employees less motivated to grab a coffee on the way to or during office hours (Covey 1998 p1). On the other hand, machines developed like the venture model can help coffee shops increase efficiency and product quality, resulting in turn in an increased level of customer satisfaction. Conclusion Starbucks is one of the world famous brands. It has also been rated among Fortune 100 best Companies to work for. Since expansion is an ongoing trend, it should improve its efficiency by exploring foreign markets with the objective to become an enduring company with strong global identity. Starbucks is growing rapidly worldwide, but to expand further it needs to change its traditional approach and customize itself to the local needs. References Burka, Paul (2005), "Power." Texas Monthly. pp 98-99. Cohen, William (2001); How to Make it Big as a Consultant. New York: Amacom, p 23 Covey, Stephen R. (1998), "Is Your Companys Bottom Line Taking a Hit?" June 4, PRNewswire p 1 http://www.business-ethics.com/starbucks_coffee_company1.htm retrieved on December 9th 2007 http://www.starbucks.com retrieved on December 9th 2007 Joseph Michell 2006; The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary McGraw-Hill; 1 edition. p 17 Robbins, Stephen P (2003); Essentials of Organizational Behavior. Upper Saddle River- Prentice Hall p 23 Schultz, Howard and Dori Jones Yang (1997); Pour Your Heart Into It. New York: Hyperion, p 14 Read More