Starbucks (Organizing)

Management Style

Howard Schultz is the self-effacing chairman and CEO of Starbucks. He is the mastermind of the astonishing growth of Starbucks. He brought the coffeehouse culture of Italy to United States. Being a maverick marketer he transformed the little four store chain into the leading retailer of coffee in United States. The management style of Howard Shultz is Employee based. From his beginning at Starbucks, he has made a radical change on how the company dealt with the employees. He believed that friendly and efficient services by the employees would boost sales. He instituted training programs to improve the employees into being knowledgeable and to be employees who enjoy working. He also provided the employees with stock-options and comprehensive health insurance (Howard Schultz, 2014). This attracted talent and created a trusting relationship with the employees. The love for employees has always guided the management style of Shultz. Despite outside pressures during the company’s worst crisis to end the employee’s health care benefits and the stock-options he did not sacrifice the company’s value for financial performance and he eventually reconciled the two. It is not common for CEO’s to have such strong management principles and implement them against all odds with much conviction like Howard Shultz.

Howard Shultz, unlike other leaders he is able to balance being assertive, decisive and approachably real. This has made him different from other iconic leaders and anyone would like to have coffee with him. He is open and he shares his story willingly. Shultz is forthright about his story that gives other an ample opportunity to see his struggles. He also does not fear creating something new of a company. He is a leader who balances profit making and a benevolent employer. This made him incorporate revolutionary concepts that other people vied as financially unwise. This included the comprehensive health insurance for their employees. Shultz also accepts failure, takes the accountability and he keeps learning (Leadership Team, 2013). He is quick at owning up his missteps. As a leader, Shultz also uses his influence to spread the idea of social conscience by corporations to the employees and the world. His activism made him number one business person of the year in the fortunes list of 2011. Shultz understands that he should inspire others. He is referred to as a self-enhancing

Managers today must have knowledge in almost all fields including marketing, data analysis, finance, and accounting. They are operating in a more competitive environment with less time between one decision and the next. Companies are also operating globally, which means each decision carries great significance.  Fortunately, they have more data than managers had two decades ago. The expansive knowledge that managers are expected to have today is supposed to help them make sense of the information provided for making decisions (Yang, 2007).

Another significant change in management practice has been the move to see organizations as systems whereby inputs undergo processing to become outputs. This has led to greater collaboration between departments within organizations to save costs and improve quality. Starbucks for instance has improved the relationship with its suppliers, with a view of making them part of the value chain. Suppliers are informed of the expectations of customers and are therefore able to adjust their supplies to suit the needs of customers (Yang, 2007). The company is also moving to produce its own coffee to create independence from suppliers.

Lastly, the interviewee noted that managers at the company today are concerned about how customers view the company. With technology, customers are now more powerful and can air their views about the company quite easily. As such, the company uses social sites and its website to answer customers’ questions and address their concerns (Yang, 2007).

Leadership Style

 Leadership is one of the major four functions of management. Anyone can have the title of being a leader or a manager, but not everyone can demonstrate it effectively. A leader is put into place to help develop and maintain the standards and core values of a company. They are to lead by example, quality, excellence and perseverance with the goal to achieve the highest success as possible. Starbucks is a company that has over 18,000 stores in 62 countries. This company demonstrates servant leadership and goes beyond the needs of its customers to the needs of the community. (Starbucks Leadership Style, 2013).

The Starbucks Foundation awarded nearly 100 Youth Leadership grants to young aspiring teens by investing and developing their skills to become extraordinary leaders. The senior executive, Howard Behar, has always been a firm believer in establishing the Starbucks culture, which expresses the importance of "people over profits."  He has coached over hundreds of leaders and revealed ten principles that help guides his leadership. The C.E.O himself, Howard Schultz, actually received the 2013 Kellogg Award for Distinguished Leadership. This demonstrates the trickle-down effect from the executive to the employees how meaningful and serious leadership is taken within the company.

Personal Interview:

      I located a personal, 26-minute interview with the C.E.O himself that touched on a variety of different subjects such as organizational structure, ethical sourcing, CSR, leadership, and ethic. In this interview by Karen Davila, he was asked to give five tips on how a person could become a successful entrepreneur. Entrepreneurs are usually innovative leaders who are not afraid to take risks. They feel they have something to "offer" that maybe unique from the average. His five tips were:

1. Dream and then dream bigger

2. Things cost and take longer than expected so you must raise money

3. Surround yourself with people who are like-minded

4. Share your success

5. You will need luck

He was also asked what was one his biggest fears? Schultz stated that failure was one of his biggest fears. He also mentioned the lack of leadership as a concern in the industry. When Starbucks took a fall when he stepped down, he came back and reminded his workers of the tradition that Starbucks was all about. Mr. Schultz also stated in another interview that, "Leadership is not always having the answers, but leadership is staying truthful and authentic.”

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