Importance of Organizational Culture in Starbucks

This case study focuses on the importance of organizational culture in Starbucks. It discusses the SWOT and PESTEL analysis of Starbucks, evaluation of CSR popularity, styles of leadership, and the significance of organizational culture. The study also includes a reflection report on the experience of writing the report.

Case Study

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SWOT and PESTEL of Starbucks...............................................................................................1
Evaluation of popularity of CSR..................................................................................................3
Styles of leadership......................................................................................................................4
Importance of organizational culture...........................................................................................6
Reflection report..........................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business Environment is a sum total of different types of external as well as internal
factors which create a particular influence on the business organizations (Aribawa, 2016). Thus it
is important for the organizations to make sure that they are considered in an effective manner so
that they are able to adjust in an effective manner within the environment and take appropriate
decisions for the future time period. This case study is based on Starbucks. It is an American
multinational chain which provides coffee and other related food products to the customers. In
this project, there will be a detailed focus on SWOT and PESTEL for Starbucks, evaluation of
popularity of CSR and comparison and contrast of different styles of leadership. Additionally,
focus will be made on importance of organizational culture. Also, a reflection report will be
made which will detail the experience in the writing of this report.
MAIN BODY
SWOT and PESTEL of Starbucks
SWOT analysis- SWOT analysis is an internal analysis tool which is used by the
organizations to assess their internal environment (Calabrese and et.al., 2018). This analysis in
the context of Starbucks is as follows-
SWOT analysis of Starbucks
Strengths Weaknesses
 Starbucks has a global chain of
restaurants all over the world and thus
this offers it an advantage in the terms
of targeting of various types of
customers.
 Starbucks has skilled employees who
are quite effective in doing their work
and thus are able to ensure that they can
achieve the organizational goals and
objectives.
 Starbucks is required to make
improvements in its pricing strategy
because it charges very high prices
form its customers and thus this creates
an impact on the level of profits.
 Starbucks needs to ensure that it caters
to the demands of the various segments
of the customers because at present it is
focusing only on certain segments of
the customers by catering to their needs
and requirements.
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Opportunities Threats
 Starbucks needs to make use of the
opportunity of expanding in countries
where it is not present as in this way it
will be able to ensure that it earns
higher-level of profits in the future time
period.
 Starbucks has to make sure that it
identifies the ways through which
innovation can be brought in its
processes so that goals and objectives
can be attained.
 Starbucks faces a threat from the higher
tax rates which the government is
setting as it leads to an increase in its
overall level of expenditure and thus
creates an impact on the level of profits
which the organization is earning.
 Starbucks faces a threat from the
various emerging players in the market
as it can create an impact on the overall
level of profits which it is earning.
PESTEL analysis- It is an external analysis tool which is used by the organizations so
that they are able to make a thorough assessment of the macro environment in a highly effective
manner (Civelek and et.al., 2016). The detailed analysis in the context of Starbucks is as follows-
Political factors- These are the factors which create an impact on the organizations
because political situations can change anytime (Eling and Schaper, 2017). Thus for Starbucks it
is important to consider them and create strategies for dealing with the impact which is created
by them. For example -Government policy, Political stability.
Economic factors- These are the factors which impact the organizations because they are
required to consider the situations which have been created in the economy. Starbucks is
therefore required to ensure that it can consider these factors so that it is able to earn profits. For
example- Economic growth, Disposable income.
Social factors- These factors are important because the social conditions can change
anytime and thus due to it an impact is created on the organizations. Thus, for Starbucks it is
crucial to identify the impact which has been created by them. For example- Health
consciousness, Lifestyle attitudes.
Technological factors- These factors are important to be considered by the organizations
because technology can change anytime thereby putting an impact on the level of operations.
Therefore Starbucks is required to make sure that they are considered so that adjustment with
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dynamic changes can be made effectively. For example- Technology incentives, Level of
innovation.
Environmental factors- For the organizations, it is important to consider these factors
because nowadays the customers are environment-friendly (Fabuš, 2017). Thus it is needed from
the managers of Starbucks that it makes due consideration of these factors. For example-
Weather, Environmental policies.
Legal factors- In the firms, the requirement is to ensure that the legal rules and
regulations of the government are followed (Gaganis, Pasiouras and Voulgari, 2019). Thus the
requirement from Starbucks is that it is able to make a due consideration of these factors in an
effective manner. For example- Discrimination laws, Antitrust laws.
Evaluation of popularity of CSR
Corporate social responsibility i.e. CSR refers to the requirements which are there from
the companies so that they are able to be fulfil their social obligations in a highly effective
manner (Gavurova and et.al., 2017). Thus like other companies Starbucks is also required to
fulfil its CSR so that it is able to ensure that it attains higher-level of profits in the future time
period without facing problems and issues.
The popularity of CSR has influenced the business in the following manner-
Creation of a liability- CSR has created a liability for the businesses which they are
required to fulfil. Thus in this way it has affected businesses because they are required to set
aside certain funds as a provision because they are required to fulfil their CSR in a highly
effective manner. Thus Starbucks is also required to make sure that it fulfils its CSR so that it is
able to contribute something substantial towards the society.
Responsibility towards the society- CSR has to be fulfilled by the businesses because
they are required to fulfil their responsibility towards the society. This enables them to be able to
target social welfare by adding values towards the society. Thus the requirement from Starbucks
is that it is able to contribute something substantial by providing products and services which are
valuable for the customers for the price which they are paying to purchase them.
Requirement as per the law- The recent changes in the laws for the companies have
made it mandatory for them that they fulfil their CSR in a highly effective manner (Głodowska,
2017). Thus, Starbucks is required to make sure that it is able to adjust according to the various
types of changes which have been made as per the law.
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Goodwill- When a company regularly fulfils its CSR it ensures that that there is a
substantial increase in the goodwill in a highly effective manner. Thus for Starbucks it is
necessary that through fulfilment of CSR it can ensure that goodwill is enhanced effectively and
efficiently which can provide the required benefits for the company in the future time period.
Starbucks is a leading global chain which has stores all around the world. It is fulfilling
its CSR goals by taking the following steps-
Sourcing ethically and sustainably- To ensure that the customers are offered the right
products and services Starbucks makes sure that it sources them from the right source so that
they can be highly useful for the customers.
Creation of opportunities- Starbucks is committed towards ensuring that it is able to
provide different opportunities related to education, training and employment to people of certain
sections in the society which can ensure their empowerment.
Leading in Green Retail- Starbucks is leading in Green Retail by ensuring that it makes
use of its various resources in such a manner which is sustainable towards the environment in a
highly effective manner.
Strengthening of communities- Starbucks is ensuring that it strengthens the
communities by providing the members of communities a chance to show their potential and
contribute something substantial towards the society.
Styles of leadership
Leadership refers to a skill through which a leader leads the people within an
organization through displaying the right abilities (Ištvanić, Crnjac Milić and Krpić, 2017).
There are different styles of leadership. These are explained as follows-
Autocratic leadership style- In this style, a leader takes strong decisions in a highly
effective manner (Jevšenak, 2019). The leader does not consults the other subordinates before
the taking of such decisions and thus in this way autocracy is established within the organization.
In Starbucks, the leaders can make use of this style so that they are able to take quick decisions
within a short-period of time.
Advantages-
 By making use of this style the leaders can make sure that they can strong decisions in
the future time period.
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 When this style is used by the leaders this makes sure that proper instructions and
directions are provided to the subordinates so that they can perform their tasks effectively
and efficiently.
Disadvantages-
 This style can put an impact on the decision-making of the various subordinates in the
organization which can affect its functioning.
 The use of this style can impact the organization because it establishes an autocracy in its
functioning.
Democratic leadership style- In this style, a democracy is established within the organizations
(Krajnakova, Navickas and Kontautiene, 2018). Thus this style is very helpful for the
subordinates so that they are able to take decisions which can be useful for the companies. Thus
the leaders in Starbucks can make the use of this style which will ensure that they are able to
ensure the democratic decision-making within the organization.
Advantages-
 The use of this style is very useful for the organizations in making sure that democracy is
established within the decision-making.
 Using this method the firms can make sure that they are able to develop the decision-
making skills in the subordinates.
Disadvantages-
 When this method is used by the organizations it leads to more time in taking of
important decisions.
 The use of this style in the firms leads towards lack of strong decision-making by the
leaders.
Laissez-faire style- In this style, the leaders in the organizations give the authority to take most
of the decisions to the subordinates and intervene only in important matters (Krajnakova,
Navickas and Kontautiene, 2018). Thus, in Starbucks the leaders can make the use of this style
so that they can delegate their powers and concentrate on dealing with only the important
matters.
Advantages-
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 The use of this style is helpful for the organizations because it ensures that the leaders are
able to concentrate on taking decisions in important matters which ensures that they can
put their focus on various other tasks.
 Using this method is quite useful for the organizations as it makes sure that the decision-
making power can be used in the right manner by the subordinates.
Disadvantages-
 This style is not useful for organizations because it creates a lack of control in the
functioning which can create an overall impact on the processes.
 The use of this style creates a disadvantage for the firms because it can lead towards lack
of following of directions and instructions by the subordinates.
Justification- According to Antunes and Franco, 2016, it is very important for the
leaders to be able to select a right leadership style according to the various types of needs and
requirements in the organizations. This makes sure that the leaders are able to display the
appropriate skills and abilities which will help them in leading an organization in a better
manner. Thus, it is recommended to the leaders of Starbucks that they should make the use of
Democratic leadership style. By making its use, they will be able to establish democracy within
the organization. Also this will ensure that the subordinates can use the decision-making power
to take effective decisions in the future time period.
Importance of organizational culture
Organizational culture is the collection of values, expectations and practices which can
guide and inform about the actions of the different team members (Organizational Culture:
Definition, Importance and Development, 2020). For the businesses it is quite important to take it
into consideration so that they are able to ensure that they set up a positive culture which can
influence the employees to provide their best and thus ensure that the various types of goals and
objectives can be attained. Like other organizations, Starbucks also has a distinct organizational
culture which the managers can influence to achieve their goals and objectives.
Importance of organizational culture-
The organizational culture is quite important for the organizations because the managers
are required to ensure that they can set up a positive culture which can influence the performance
from the employees in the organizations and thus can lead towards the achievement of various
types of goals and objectives without problems and issues. Also for the managers it is important
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to take it into consideration so that they are able to take the right decisions. Its importance in the
context of Starbucks is as follows-
Unity- It is important for the managers to focus on setting a right organizational culture
so that the unity can be displayed in a highly effective manner. Therefore, in this manner the
management of Starbucks is required to ensure that they can stay united to move towards the
achievement of goals and objectives which can be achieved only by framing a positive
organizational culture.
Business success- For the management, it is quite crucial that they set up a right
organizational culture which can induce the business success (Mawejje and Okumu, 2016). Thus
in this manner they will be able to make sure that the organization achieves sustainable level of
success. Therefore, Starbucks is required to make sure that business success can be achieved by
setting a positive organizational culture in an effective manner.
Stability- For the managers, it is required that they maintain the desired level of stability
in the organizations by setting up a right organizational culture. Thus, in the context of Starbucks
it can be said that a right organizational culture is required for the purpose of maintaining
stability.
Sense of direction- In the organizations, a positive organizational culture is able to
provide a sense of direction to the subordinates. Therefore, in Starbucks this can be very crucial
so that its managers are able to take the organization in the right direction leading towards the
fulfilment of goals and objectives.
Reflection report
As a student studying in the college, I was given an assignment by my teacher. The topic
of this assignment is Starbucks Case Study. When I was given this project initially I was
unaware about how to start it. This was so because I had not worked on such a project before.
Thus, working on it was an entirely new experience for me.
For describing my experience, I will make the use of Gibbs' reflective cycle. The use of
this model enables a person to learn from his/her experiences by reflecting on the same. The
various stages of this model are explained as follows-
Description- Here, the situation is described in detail (Prajogo, 2016). When I was given
a chance to work on the project of Case Study on Starbucks I was initially quite nervous. The
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reason for my nervousness was that I had to identify the right method which I need to adopt to
start the project and ensure its timely completion in an effective manner.
Feelings- It refers to the feelings during the experience. When I started to work on the
project given by my college I was initially quite skeptical on the method I would need to adopt to
complete this project in an effective manner. Thus overcoming from the initial phase of
nervousness I started developing positive feelings as I gained confidence that I can complete the
assignment in an effective manner.
Evaluation- It means evaluating the approaches which have been adopted to deal with a
particular situation. While doing the project on Starbucks, I had to deal with various types of
situations. Sometimes some approaches worked well and sometimes they did not. Thus by
evaluating the mistakes which I made I ensured that the same mistakes are not repeated again.
Thus in this manner I identified my shortcomings and used rectifying approaches to remove
them.
Analysis- Here, details something which has happened are analysed. While working on
the project, I identified the various points at which my performance was not according to the set
standards and parameters. Thus by performing this analysis I was able to make sure that the
required improvements were made which led towards an increase in the performance.
Conclusions- Here, the summarization of something which has happened is made. While
working on this project I made a short summary of the different types of actions which I had
taken allowing me to ensure that I find out the areas where significant improvement are required
to be made in the future.
Action plan- At this point, detailed planning is done regarding the actions which are
required to be taken when a similar situation is encountered in the future (Uchihira, Ishimatsu
and Inoue, 2016). Thus, by working on this project I found out that in the future I need better
planning and more clarity in my concepts so that I can ensure that I deal with such assignments
in a better manner.
Thus, I can say that while doing this project I was able to make sure that I learnt a lot
while researching on a wide range of topics which were related to it. Thus in this manner, I will
be able to use my learning experience in a better manner in the future time period to facilitate the
achievement of goals and objectives.
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CONCLUSION
From the above case study, it can be concluded that a business environment is a sum total
of different types of factors which concern the business. The use of SWOT and PESTEL can be
made to analyse the internal and external factors concerning the business. The popularity of CSR
can ensure that the business is influenced in a positive manner to be committed towards the
fulfilment of the social obligations. There are different styles of leadership which can be used
within an organization. Organizational culture is important and there is a requirement for the
managers to focus on it so that they are able to positively influence behaviours. Also, a reflection
can be made so that there can be a learning experience for the future to approach the projects in
an effective manner.
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Online
Organizational Culture: Definition, Importance and Development. 2020. [Online]. Available
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