Organization Structure And The Organizational Structure Of Starbucks

As the world’s number one specialty coffee retailer, Starbucks sells coffee drinks, food items, coffee beans, and coffee-related accessories and equipment. In addition, Starbucks sells whole-bean coffees through a specialty sales group and grocery stores. Starbucks has grown beyond coffee into related businesses such as coffee-flavoured ice cream and ready-to-drink coffee beverages. The purpose of this paper is to analyze Starbucks business strategy, customer value proposition, company’s operations and the risks to financial results and reporting in the short term.

This means that there must be sufficient capital, staff and raw materials so that the organization can run smoothly and that it can build a good working structure. Two of the elements in an organizational design will be used which is work specialization and chain of command. The breaking down of jobs into smaller and specific jobs is work specialization (Robbins, S., 2011). The jobs at Starbucks are highly specialized. According to (Roberts, 2015), some stores operate with a drive-thru window. At any given time, there will be four employees working to operate the drive-thru window: one to take orders, one to handle cash, one to make coffee, and another to help where needed most. Chain of command is when any employee should receive orders from one boss only under any circumstances (Carl A. Rodrigues, 2001:882). Looking at (TheOfficialBoard, 2015) Mr Schultz is the CEO and he manages a team of five chief and five presidents. There are also nine senior VP’s who answers to these chiefs. The Starbucks organization structure consists of board members who make decisions with Mr Schultz. Mr Schultz will then discuss plans with their chiefs in order to implement rules and guidelines to successfully achieve the goals of the board. These are then passed down to the senior VP’s who implement them to the rest of the organization. It is then broken down into the regional offices where a manager oversees the operations of 8-10 stores. Finally, each store has a manager, assistant manager and employees. Extracted from an article, the job duty for the employees is to provide excellent customer service while making handcrafted, quality beverages. This is the chain of command for the Starbucks enterprises. There is a total of thirty-nine executives in the Starbucks organizational chart which is

• Starbucks establishes a well-developed system to keep good relationship between managers and employees. At first, the leaders of a retail shops use the same title “partner” as a basic level worker to narrow the gap of bureaucracy. Furthermore, they co-work in the first line to eliminate the distance between different statuses.

Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed.

To continue off of the centralizing of decision making, the company should also consider a more mechanistic organizational structure. This is a setup that is used effectively by companies such as McDonald’s as the company has a process in place to generate just the right amount of burger patties, fries and soda syrup for each branch to run smoothly. With Starbucks implementing a structure such as this, it would allow for each manager to have a centralized oint of contact for all goods. This, in turn, will lessen the burden for each branch to find their own product vendor. It will

Starbucks has always had a strong history of demonstrating some of the strongest instinct of organizational design; that's no surprise as much of the success of the company has been built on this practice. However, Starbucks needs to continue to adapt with the changing times and environment and can do this more readily by applying the four lessons that Nadler and Tushman specify in regards to organization design. As Nadler and Tushman point out, "The environment drives the strategic architecture of the enterprise, either through

Starbucks current structure is categorized as a mechanistic organization, which is comprised of highly vertical and horizontal complexities, highly formalizations, highly centralizations, tapered lengths of control, and highly standardizations. The CEO of Starbucks, Howard Shultz, has worked to create a more efficient and streamlined structure where information can flow freely

Starbucks is a matrix organizational structure where a business is split into different divisions of whatever functions needed and then has multiple managers for each division and finally the lower tier members. This organizational strategy allows information from the customers to travel up to the lower-tier of employees and to the corporate levels are more streamline in a flat organizational structure. This helps as it ensures that Starbuck’s culture of family is communicated. (Starbucks

“We are not in the coffee business, serving people. We are in the people business, serving coffee”, Howard Schultz’s philosophy has shaped and continues shape Starbucks, the world’s number one specialty coffee retailer with over 21,000 outlets in more than 65 countries nowadays (Starbucks, 2011). Starbucks was founded in 1971 and Howard Schultz joined Starbucks in 1982. In 1987, Howard acquired Starbucks and changed the name to Starbucks Corporation.

Based on past experience with Starbucks both as consumers, and undergraduate students studying about successful business, we predict that Starbucks will be a theory Y organization, that promotes empowerment within its entry-level staff. Our first impression of Starbucks when we enter a local store is simply that we are going to get a quality product. The staff always remains professional but appears to enjoy their jobs. You don’t see Starbucks employees being yelled at and it appears that all the staff is well trained and knows how to perform their jobs.

It helps to provide guidance on power relations and roles expected between different levels of staff in an organisation. It is not cast in stone but rather, should be adaptable to the environment- both internally and externally in order to meet the demands of consumers in these two distinct market places. Internally, the employees are the consumers. Often, the external consumers for whom products and or services are destined are the focus but as can be seen from the case study of Starbucks, focus on the internal customer can salvage dire situations that an organisation experiences

Starbucks structuring uses functional, geographical, process departmentalisations. Functional departmentalization achieves grouping jobs by functions preformed. Starbucks has senior vice presidents of coffee, social responsibilities, finance ect. Functional structure develops a lean corporate structure because they bring efficiency through similar specialties, common skill, knowledge, and coordination. Geographical departmentalization is grouping jobs based on territory and geography. Starbucks uses a geographical departmentalization through the president of Starbucks Coffee US and the president of Starbucks Coffee International and district mangers effectively and efficiently handle specific regions (typically 8-10 stores). District managers offer a bridge to the zone offices helping better service the needs of individual geographic markets. Starbucks uses process departmentalization distribution team controls the inventory and distributions of roasting plant, so the plant can focus on quality assurance. Process departmentalization is grouping jobs based on process and customer flow, in turn increasing efficiency. This helped Starbucks have more efficiency by having roasting plants specialization on quality.

The corporate level strategy is roughly the same as the business level strategy since Starbucks only has one primary business. I believe that fact that Starbucks only focuses on one primary business makes the organization stronger. For example, there is no chance for conflict between the business level strategy and the corporate level strategy and the entire organization can focus on a single mission. Furthermore, this strategy has allowed them to reproduce their model all over the globe. As is the case with the Japanese, Chinese

Raw Materials (Coffee Beans): Coffee bean farming is not vertically integrated into Starbucks; the company purchases coffee beans from farmers. Starbucks choose to outsource farming due to the low potential hold-up problem. For its coffee, Starbucks uses only high-quality Arabica beans, instead of regular commodity and lower quality robusta beans. Since there are a lot of market participants trading Arabica beans (i.e. farmers & Arabica beans buyers), there is an established market price. Moreover, farm land has a low degree of asset specificity, and therefore farmers’ investments do not depend only on Starbucks as

Corporate Strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of business.[1] In the case of Starbucks the corporate strategy they have implemented is unique to their industry which has allowed them to differentiate from their competitors and is summarized best by Howard Schultz CEO of Starbucks, “We’re in the people business serving coffee,[2]” high quality specialty coffee and related products in a European café environment. It is clear Starbucks is in a growth strategy utilizing three key techniques that support its Mission, “to inspire and nurture the human spirit – one person, one cup and