Starbucks Organizational Behavior

Starbucks Organizational Behavior

A company's understanding and use of organizational behavior concepts can make or break it. Just as important, if a company ignores these same concepts, it can easily spell disaster.

Starbucks intertwines and successfully uses three main organizational behavior concepts to increase the strength of the organization: organizational culture, organizational structure and motivation. The implementation of these concepts has definitely benefited the company, creating a monopoly in the United States as a coffee retailer and service company.

Organizational Culture

In the text, Organizational Behavior, Stephen P. Robbins defines organizational culture as, "a system of shared meaning held by members that distinguishes the organization from other organizations" (2005). Starbucks has a very strong organizational culture and strives to maintain that it.

Everything centers on the organizational culture within Starbucks. While being a customer service-based company and understanding that the customer satisfaction and loyalty are what will make the company profitable, Starbucks takes a different approach to customer service than other companies. By hiring employees that fit in the organizational culture (ICFAI, 2005) and treating their employees well (Lefevere, n.d.), Starbucks brings in and retains customers through their happy employees. The qualities that Starbucks hires for are "adaptability, dependability and the ability to work in a team" (ICFAI, 2005). The culture is supportive and laid back (Montana, 2005). Howard Shultz, Starbucks president and CEO, has the theory "that if you treat your employees well, they will treat your customers well" (Starbucks, 1997).

In the excerpt from 'Starbucks' Human Resource Management Policies and the Growth Challenge,' it is stated, "Starbucks was one of the few retail companies to invest considerably in employee training and provide comprehensive training to all classes of employees, including part-timers" (2005). This dedication to educating and training employees demonstrates the commitment to service that the company has. Having employees be able to answer customer questions is considered a part of reducing the cost to service each customer and also create customer loyalty and keep the customer returning time and again. Employees are trained for 24 hours and managers choose classes for another eight weeks (Nelson, 2000).

The company culture really does overflow to the customers, as most patrons can attest. To maintain the culture, Starbucks has adamantly refused to start franchises and the company itself owns the majority of the locations. In the Frequently Asked Questions on the Starbucks website, the exception of franchising is answered as: "Starbucks may enter into licensing arrangements with companies who provide access to real estate which would otherwise be unavailable such as airport locations, national grocery chains, major food services corporations, college and university campuses and hospitals" (Frequently Asked, n.d.). As a Starbucks patron that has been to different Starbucks locations across the United States, I can attest that the locations that are open through "licensing arrangements" do not usually have the charm, culture or appeal that the company-owned locations do.

Organizational Structure

Organizational structure, as defined by Stephen P. Robbins, in Organizational Behavior, "defines how job tasks are formally divided, grouped, and coordinated" (2005). Starbucks is departmentalized in that there are various departments that have different functions such as the roasting, beverage service, and administrative.

The organization attempts to be "flat" and a point has been made to avoid hierarchy and receive input from every person within the organization; its not a very formal organization because of this fact. This contributes to the atmosphere of being laid back and comfortable. It is also decentralized, with lower employees being asked to make decisions regarding the customers and service. This could be considered an extension of the organizational culture. Just as the organizational culture is laid back and supportive (Montana, 2005), so is the organizational structure.

Teams are an important aspect of the Starbucks organization. Teams perform most every task within the organization, adding to the decentralization. The evidence of teams can readily be witnessed when a person orders a beverage. The person at the register takes the order, making sure to write the customer's name on the cup--a principle that Howard Schultz uses to put the customers on more of a personal level with the staff--then the cup is passed on to the barista, the person that actually makes the beverage. The barista makes the drink and then sometimes the drink even goes through another barista or assistant to get any additional toppings and a lid. The customer is then called by name to let them know their drink is ready. I have a very complicated drink and the staff at Starbucks are always very nice and understanding when I taste it and ask them to add something. After a few times of patronizing one certain Starbucks, the staff usually recognizes me, and my drink does not have to be tweaked to taste right.

Employees are encouraged to think of themselves as owners and make suggestions for improvement to existing practices or creation of new products (Nelson, 2000). Not only are employees asked to think of themselves as owners, many are owners. Through a special stock option plan, many employees are also shareholders in the company.

Motivation

Stephen P. Robbins defines motivation "as the processes that account for an individual's intensity, direction, and persistence of effort toward attaining a goal." Determining what is important to employees and providing those things as incentive to meet company goals is one of the factors that help make Starbucks so