The Matrix Organizational Structure: A Case Study Starbucks

Organisations are social entities that involve individuals and groups to obtain benefits and goals in different ways. The struggle for resources, personal conflicts and a variety of influence tactics used by these social entities assists in obtaining them.

Structure is the basis through which an organization seeks to create control the direction of an organization. This is completed through clear definitions of the allocation of work, differentiation, and the coordination of having those responsibilities working together towards the efforts of the organization, integration (Bolman & Deal, 1993, pp). Through these methods, the organization is able to devise a division of labor that collaborates to bring about the missions and goals of an organization. The structure that comes about from this can be varied in their rigidness and flexibility it allows, and to an extent this is a great contribution to its success.

In their organizing tasks they have to build a structure of working relationships between all of the members in the organization, that best allows them to work together and attain goals.

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

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

Organisations are made up of individuals brought together to enable the organisation to achieve its mission. The organisation's structure will determine how these individuals are brought together and how they relate to one another. The success of the organisation is dependent on each individual working together to achieve the common

Organizational structure is a system that consists of explicit and implicit institutional rules and policies designed to outline how various work roles and responsibilities are delegated, controlled and coordinated. Organizational structure also determines how information flows from level to level within the company (investopedia.com, 2017). If one level or department does not undertake its function accurately the entire business suffers, because all the departments interrelated to each other. There are generally four types of organizational structure:

Effective organizational structures define how job tasks are subdivided, grouped, coordinated, and managed. Six key components of organizational structures include division of labor, departmentalization, chain of command, span of control, centralization, and formalization (Remme, Jones, Van der Heijden, & De Bono, 2008, p. 79). Each element influence how employees interact with each other to reach organizational goals. Different structures are common in similar organizations among high performing organizations (Reimann, 1974, p. 707). The most appropriate structure will depend on the unique needs and culture of the organization.

“Divisional structure is known by the approach of having similar skills and resources grouped together into divisions” (Draft, 2013, p.318). This occurs when a company has common goals that the company wants to achieve. This allows all skills and departments to come together and produce the goal there are looking to achieve. In this type of structure not one person is viewed as important than the next one, because it takes everyone to work together to produce the outcome the company wants to achieve. “The matrix structure uses both functional and divisional structures to run an organization” (Draft, 2013, p.321). This allows the company to

Structure is vital in shared governance where expertise and knowledge serve as guides to actions. It requires a commitment to the organizational mission and the profession of the organization. The practices must be structured within the rules of the employer and the laws that govern the industry. It also requires consistency in definitions, standardization, and the design of the governance with regular evaluations of performance levels.

Starbucks first opened its doors in Seattle’s Pike Place Market with the name being coined from that of Moby Dick’s first mate (Schultz & Yang 1999). It has spread its shops across North America, all over Europe, the Middle East, Latin America as well as the Pacific Rim with an estimated 35 million customer weekly (Michelli, 2008). With tremendous growth from a small time coffee shop, the company has matured to an international icon that today it is one of the world’s leading retailer, roaster and brand specialty coffee (Story, 1971). The company offers whole bean coffees, espresso beverages, and confectionery and bakery items.

An organization, put in simple terms is a group or assembly of people working alongside one another to achieve common goal or objective through a division of labor and or responsibilities. Business organizations in free market economies are formed to provide services or deliver goods to ultimate consumers for profit. Generally speaking, people form an organization because it provides a means of using individual strengths within a group to achieve more than can be accomplished by the aggregate efforts of group members working individually.

Starbucks have played various roles over the last years to become the global contributor that added value to the society. The Company implemented a strategy of expanding its stores. It developed a geographical expansion of a three year strategy that targeted the areas that had favorable demographic profiles with the company's operation infrastructure. Its selection of the targeted region which served as a hub supported the goal of opening more stores. The Company oversaw the expansion process by creating zones that directed development for each region to implant its culture by opening new stores. The store launched grew steadily and more successful and in 1995 there were about 17,000 stores that fully served his customers (McGraw-Hill Companies, 1999).

The 1971 founded company Starbucks has undergone an impressive expansion throughout the last years and as a result now is the leading coffee house retailer in the world. Due to several joint ventures, partners, and an enormous amount of directly operated stores, it is present in more than 34 countries and serves around 33 millions of customers per week.1 Moreover, the company significantly increased its global publicity within subscribing to strategic alliances with various hotels, air carriers, schools, and stadiums.

At least two different organizational structures are identified, described, and compared in terms of their design principles.