Contemporary Management Issues - Assignment Sample

CONTEMPORARY
MANAGEMENT ISSUES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Two change drivers impacting upon the organization.................................................................3
Change drivers affecting strategic decision making along with operational activities................5
Critical Assessment of Response of the Organization...............................................................10
Recommendation Regarding Enhancing Organization's Response...........................................11
CONCLUSION..............................................................................................................................12
.......................................................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Management is basically the procedure which is being employed for controlling as well
as managing the organizational affairs. Contemporary management predominantly includes
planning, organizing, leading and controlling the business operation s to attain goals. Starbucks
is primarily a coffee company as well as coffee chain established by Jerry Baldwin in 1971 and
placed in Washington, US. It mainly dominates in the products like tea, coffee, drinks, beverages
etc. This report addresses the two change drivers impacting upon the organization, Change
drivers affecting strategic decision making along with operational activities, Change pressures
due to two drivers, Evaluation of current response of organization and Recommendation for
enhancing the response.
MAIN BODY
Two change drivers impacting upon the organization
Drivers of change are basically the forces or factors that brings an extreme change in the
industry and thus affect their operations. These factors generally alter the actions of the business
which results in the change of their environment. Although there are plethora of forces impacting
upon the business of Starbucks but the most significant which has revolutionized their entire
functioning and has helped them in flourishing their business are social and environmental
factors.
Social factors
Social factors normally encompasses population rate, consumers attitudes, health
consciousness, cultural barriers etc. These social factors has impacted Starbucks in a great way
as more and more population are now becoming health conscious (Schaltegger and Burritt,
2017). According to a survey, it has been reported that around 60% of the population wants
product which are made up of natural recyclable material and are free from the harmful mixture
of paper and wood as this would affect their health in a great way because the toxic chemicals of
the plastics not only affects the health bust also the environment (Ferlie and Ongaro, 2015). This
increasing awareness of the people towards their health has led Starbucks to transform their
operations for the welfare of entire society and introduce recyclable cups which would replace
toxic plastic cups. This change of the attitude of consumers from plastic to recyclable cups would
help Starbucks to increase their expansion and also serve the community better. Besides this,
This change would also benefit them in terms of increasing the customer base. The spending

pattern of the population is variable and thus these recyclable coffee cups would mostly target
lower as well as middle class group besides higher income group. These cups would be cost
effective and would attract all range of income groups. Although this has positive impact on their
business but somewhere the cultural barriers would affect this change in a negative way.
While some people comprising the population views this shift from plastic to paper in a
beneficial way, but this might affect the values and ethics of some people who thinks it is against
their culture to use paper products as these are made by cutting the trees which they oppose.
While for these people of the community for whom harming trees are against their values, they
might boycott the Starbucks product. This eventually may lead to the loss of their customer base
and would also not entice the new customers. However, this change in Starbucks would have
more impact on the society who are more concerned of their health and are willing to buy the
products which will be healthy in each and every manner.
Environmental factors
Environmental comprises of the weather, change in climate, environmental policies,
compliance to environmental acts etc. These factors would also affect Starbucks in a positive
way as they committed to introduce compostable as well as recyclable cups. While the company
is planning to launch recyclable cups, this would help in reducing the pollution in a great way.
The various toxic gases released from the plastic like nitrogen oxide enters the ecosystem and
hinders the equilibrium between nature and earth. Thus these biodegradable cups would reduce
the emission of these harmful chemical gases which eventually would protect the ozone layer.
Besides this, This shift from plastic to recyclable cups would also reduce the ocean pollution
where plastic is damaging the lives of aquatic animals and coral reefs (Ferlie and Ongaro, 2015).
As the plastic is usually thrown in the water bodies, aquatic lives consumes it and lost their lives.
Therefore, this step of Starbucks to change their production process and bring compostable
coffee cups would also save the natural habitat.
Besides this, due to their change to paper coffee cups, the disposal of waste which is
being dumped in the landfills would reduce to a great amount. The major environmental factor
which is climatic change would also affect the company where the lesser emission from these
cups would create a balance between weather and ecosystem due to which the intensity of rain
would become optimal and people would be able to breathe fresh air without the harmful gases.
Apart from all these positive effects, complying to changing environmental policies would be

challenge for the company and might affect them in negative way. As different countries has
different environmental policies, it would be difficult fort Starbucks to study all these and
comply to them. Their overall operations would change because they would have to keep in mind
the different environmental acts which sometimes might not be in their favour. However, the
change from plastic to biodegradable coffee cup will influence the company in positive way and
will increase their goodwill for contributing towards the sustainability.
Change drivers affecting strategic decision making along with operational activities
The social and environmental factors which are the essential change drivers for Starbucks
is impacting their decision making in a great way. The key strategy if Starbucks since its
commencement is product differentiation and offering premium product mix by increasing the
reputation of coffee beverages and providing supreme services to the customers to eventually
build value brand which would be extremely costly for the competitors to imitate (Redman and
Dundon, 2017). While the social factors helps them in making the decision by considering the
values and cultures of consumers, environmental factors are guiding them towards the strategic
decision making by analysing the changing environment of different countries and different
locations.
Social factors has influenced its operational activities wherein the the manufacturing of
their main ingredients and products are totally based on the population growth & health
consciousness of people. The main operation activities include manufacturing , marketing and
selling. As the company operates in different countries, its population growth becomes an
important factor while making decision and managing the operational activities. From producing
the products to selling it, the cultural barriers of people also matter. Like the people in UK are
mainly used to the alcoholic drinks and mainly prefer coffee and tea products therefore this
affect their decision making and have nearly 5 manufacturing units in UK where mainly the
green coffee beans are being roasted and shipped to the outlets. Besides this, the main social
factor which is health consciousness are also impacting their strategic decision making and hence
the operational activities. In US, high population of Britishers prefer organic and herbal coffee
blend and vitamin teas therefore the marketing and manufacturing department of Starbucks in
US are focusing more on manufacturing caffeine free coffee and the advertising team among the
US populations. Thus these social factors are impacting their decision which varies from country
to country.

Besides the social factors, environmental factors have also projected an extreme impact
on the operations of coffee. The different environmental policies of different countries are taken
into consideration by Starbucks while making the decision for future as well as for the present.
This also affect their operational activities like manufacturing, distributions, etc. In UK, the
environmental acts are totally different from other countries and mainly emphasises preserving
the wildlife and protecting the ecosystem form toxic gases. Thus, the compliance of Starbucks to
these laws are also influencing the way they addresses their products which in turn, is affecting
their decision regarding producing the product where they are now trying to filter the gases
emitted by producing various ingredients through a series of steps and also making an effort to
open their manufacturing plants on the country side where these emission would not affect
environment and human life. Besides this, through complying to the law of preserving wildlife,
they have decided to launch biodegradable coffee-cups which would replace the plastic and
wooden cups and eventually will save the aquatic animals as the consumption of plastic leads
them to death. This has affected their strategic decision as they are involved in obeying these
laws to expand their business. In US, the environmental laws calls for the compliance on
pollution acts therefore the operational activities of Starbucks has been altered to these laws in
US.
The vehicles in distribution logistics of Starbucks through which the raw material and
goods are being supplied to the outlets are being modified and the the company has decided to
use vehicle which would emit less than 0.5% of carbon from their engines which eventually
would reduce the air pollution. Apart from this, the company are ow trying to avoid heavy
equipments and machineries which produces heavy noise and focussing on the apparatus that has
the software fitted to reduce noise pollution (Child, 2015). Thus, their adherence to these laws in
US has altered their entire operation management and has provided the management with the
factors which they need to consider while making decisions in different countries.
Therefore these both the factors somehow affect the Starbucks in their decision making
and help them to analyse the environment of different countries. Both social and environmental
factors transforms their operations management and present with a wide range of aspects based
on which the company have to make their decisions which would be in favour of both, company
as well as the consumers along with the environment. These forces are projecting an extreme
pressure on the company to take the decisions and inculcating innovation in their business which

would bring a beneficial change for the entire society and company. These two factors actually
defines the way in which the company would operate and achieve their goals and objectives.
Change pressures due to two drivers
There are various pressures which are affecting Starbucks towards the change from
plastic and wooden made cusps to biodegradable and recyclable coffee-cups. These pressures has
compelled the company to bring a sustainable change in their operations and bring a product
which would not only benefit the consumer but would also affect the environment and its aspects
in a positive way. Whether from the government or from the entire society, the nature of these
pressure have been imperative for Starbucks which has eventually led them to move towards the
modern era of sustainability.
Taking about the social pressure, the pressure from the consumers and their fluctuating
demand has enabled the company to put forth the new strategy of providing a great service to
them. The first pressure is from the consumers where with the advancement in various modes, a
large population is demanding for the sustainable products (Hislop, Bosua and Helms, 2018).
Irrespective of the country, the increasing awareness of the people for healthy products has
pressurized company to give up on the plastic & other cups and produce the coffee cups made
from such a material which can be reused after the consumption as well as emit no harmful
chemicals in the content within the cups. The growing need of the population for using
environmental friendly products has eventually led Starbucks to make their operations and
production process well defined where the people will receive the beverages and drinks in such a
cup which can be recycled after use. Besides this, the changing lifestyles of the consumers has
also resulted in the pressure on Starbucks to give a thought on the sustainable products. While
visiting the coffee shop, even a middle class individual now wants highly stylish cups which
represent their personality and lifestyle. Thus, this has caused the company to produce beautiful
and stylish coffee cups within which the customers would like to drink and that can be easily
degraded after the use. Living in a luxurious lifestyle, people wants the products which reflects
their class thus this has forced the Starbucks to introduce cups such that the customers like to use
it again and again.
Considering the environmental factors, various pressures from the government as well as
the charitable trust and NGOs working towards the betterment of environment has compelled
Starbucks to shift their focus from plastic cusps to the biodegradable coffee cups which will

eventually lead to the reduction in harmful effects to the environment. The foremost pressure
comes from the government of different countries as different government levies varied
environmental practices which has enabled the company to follow each of them. These
sustainability practices like environmental protection act, wildlife preservation stresses upon
reducing the emission of harmful gases in the environment. Due to these, Starbucks have been
under the great pressure to introduce reusable and compostable coffee cups which will decrease
the discharge of toxic gases that are the main constituent in plastics (Naranjo-Gil, Sánchez-
Expósito and Gómez-Ruiz, 2016). Like in UK, the environmental laws are highly stringent and
government are extremely strict towards the companies whose carbon credit are lower to
minimum level therefore due to the intense pressure of UK government, Starbucks are required
to produce cups which are highly environmental friendly and which will not lead to the
degradation of ecosystem. This will eventually help them in becoming the company having
carbon credit.
The numerous sustainable practices prevailing in the country and levied by the
government has enabled Starbucks to make their process more desirable and efficient ranging
from manufacturing to distribution logistics. The governmental oppressions have forced the
company to make the production process such that it discharge the carbon and other harmful
gases to less than 0.5% as well as the vehicles emits minimal gases while taking the raw material
to plants.
Apart from the governmental pressures, various NGOs ad the environmental changes
becomes the main driving force which has urged Starbucks to tap on the reusable coffee cups.
The NGOs working towards the welfare of wildlife has put forth the immense pressure on
company to modify their cups in such a way that no animal gets hurt even if it consumes it.
When the plastic gets into the water bodies, it affects the aquatic lives and blocks their breathing
power thus this increasing awareness of population to save the aquatic lives have also allowed
Starbucks to give away the use of plastics and serve the drinks in compostable coffee cups.
Along with this, the fluctuations in the climate and weather has been the major reason behind
introducing these products. As the release of toxic contaminants affects the weather as well as
the intensity of rain, Starbucks are now liable to make their mugs and cups eco friendly which
will not unbalance the equilibrium between ecosystem and climate and thus result in optimal
rainfall.

Decision making tools
While the company is planning to bring the significant changes within their operations,
SWOT will help them in making the most effective decision making and will also assist them in
achieving their strategy which is becoming the product differentiator. The main strength of the
company is that it has the product of highest quality which enables them to have considerable
production output. Another strength is that it has highly efficient workforce all over the world
which are engaged in bringing innovation in each and every sector and which gives them an
advantage over producing compostable cups (Tukhvatulina and et.al.,2016). The weakness of
Starbucks which comes in between while bringing changes in their coffee cups is that they
usually have expensive products due to which the switching cost of customers to their
competitors are usually higher. Mostly the middle and lower class people tend to avoid their
products and are more likely to move to another outlet where the price is under their budget
(Parker, 2016). Besides this, another weakness comprises of the self cannibalization via
overcrowding where due to their excessive expansion leads to the self cannibalization of their
products and reduces their long term targets of growth. The opportunities that are available to
Starbucks is expanding the product mix where the company have started their product mix
expansion by entering into fresh juices along with acquisition strategy. This offers them the
remarkable opportunities.
Besides this, the company has decided to introduce compostable coffee cups which
would be a replacement over other mugs and cups. In the era of increasing pollution, this step
has opened a plethoras of opportunities for them where these cups would prove to be a dynamite
in reducing pollution and waste. Apart from this, new distribution platforms also presents a great
opportunity for Starbucks wherein the company has launched a new version of delivery system
which will help them in making their distribution more well defined and will provide them with
the chance in future to expand it. The threats for Starbucks consist of the increased competition
from competitors like McDonald, Dunkin Brands etc who are well committed in producing
sustainable products and have a great share in market when it comes to the contribution to
environment. Starbucks is still under intense pressure from these competitors who are well
known for providing healthy products and beverages. Apart from this, the decreased coffee

culture in most of the countries would be a biggest threat for them where their revenues would
trickle down.
Another tool which the Starbucks uses while making the decisions is Pareto analysis
which helps them in recognizing the changes that are beneficial for the company. While
analysing the environmental factors and social factors that would affect the launch of disposable
coffee cups, Pareto analysis list all the befits as well as problems that re being associated with
these factors. Besides this, It will also help them in assessing the benefits and impact which this
new product would have. In this, a desirable score is given to each element like during the
evaluation of demand of customer for sustainable products, a score will be given to each product
that can be considered under this. In this way, a Pareto analysis will help the company in
deciding whether the product would be a success or failure and would generate adequate profit or
not.
Critical Assessment of Response of the Organization
Change in the climate has critically affected the coffee plantation. The farmers are not
able to produce good quality and yield of coffee due to the change in the climate, such as uneven
pattern of rainfall, pollution due to plastics, pests, diseases in the coffee plant. The farmers are
shifting their agriculture to the forests due to which deforestation is being faced. This may also
impact on the prices of coffee, which may rise gradually. Now, Starbucks has an opportunity to
save everyone from this situation.
This can be made possible by actively responding and adopting the various initiatives and
plans by the Starbucks(Ertz and et.al., 2017). It can help the farmers by providing financial help
and educating them by sharing knowledge, which will help in managing the prices and
production of coffee despite of climate change.
As the pollution is being caused due to plastic, for controlling it and making the the
environment pollution free in late 2008, it was forced to take pledge for using 100% recyclable
cups. And this was finally taken into concern on 2017, and it was pressurized to commit real
money on this activity and finally implement the same.
The step was taken by Starbucks for moving forward towards this issue and make the
environment pollution free. From a study it is found that, if the pressure is being maintained then
only the company will speedily move forward to this campaign(Starbucks global supply chain
and climate change, 2017). Again, one more campaign which says, 'Cut The Cup Waste' has

also been organized so that appropriate policies and plans should be adopted and actions could
be actively implemented by both the government and the Starbucks, which will ultimately result
in getting purge of the plastics and pollution caused by it. And also better solutions can be
adopted also to solve the problems of wastes of disposable coffee mugs.
Starbucks also says that a campaign addressing 'Break Free from Plastic', that it is fully
committed towards the increasing in the usage of paper cups and eliminating the plastic cups in
its all the stores. Also, it can contribute in reducing the plastic pollution by boycotting the use of
various plastic made items used in its stores such as straws, materials used for packaging its
products, its cutlery, etc. All these efforts by the coffee company will bring positive impact on
the environment, and also fulfilling its corporate social responsibility(Cohen, 2016). This will
also limits the waste and costs will also be cut down in that regard(Atzori, Shapoval and Murphy,
2018). There are also various additional steps which can be initiated by the Starbucks for
reducing the plastic wastes and pollution, which will make the environment more clean and
worth living.
Recommendation Regarding Enhancing Organization's Response
It is being advised to the Starbucks, that in order to gain competitive advantage along
with fulfilling its social responsibility by protecting the environment(Yun and Kim, 2019). It can
take various other initiatives also for degrading the pollution and making the environment
pollution free. But, this is not possible with the only efforts of Starbucks, other organizations
should also participate and invest some time, money and knowledge in this context.
It is being recommended that 'latte levy' should be implemented and which is also
strongly supported by the public also. But the government, disregarded this recommendation. In
this the use of coffee mugs should be reduced and it should be switched with the usage of paper
cups.
Also, it is suggested that for effective and efficient working, Starbucks should offer
coupons and discounts to its customers, who tends to bring their own mugs and cups for
coffee(Lee, 2015). This change can bring a lot of progress and create a healthy environment if
adopted by the coffee chains worldwide. Starbucks also contributing in this campaign and is
using this concept of 'latte levy' in its various stores and outlets at London.
It can also enhance its performance by creating awareness among the public and
providing appropriate knowledge in this regard(Boone, 2017). Through providing educational

materials such as books, pamphlets, etc. by the organization can increasing the knowledge about
the importance of environment and its safety among the public.
It is also advised to the company to initiate a campaign and providing the customers with
free coupons, give-away, and complimentary product on carrying their packaging material,
which environment friendly and not throwing the wastes, other than in the bins provided for the
same. And the company in this regard can take appropriate steps for waste management. It can
also set-up a plant for managing the waste in efficient way. This will prove to be quiet costly, but
once implemented, will give the long-run results to the Starbucks.
As it is a Global Company which can influence others as well, positive and effective
efforts in relation to strong commitments to the environment and its protection(Starbucks Falls
Short on Environmental Commitments, 2017). It will create a sense of responsibility among
other organizations in relation to developing and continuing the practices which are highly
sustainable in nature.
CONCLUSION
It is concluded from the above study about the drivers which includes social and
environmental drivers which are mostly responsible for change in addition to their pressure on
the Starbucks and the steps initiated and policy framed to cope up with them in an efficient
manner. Also, it mentions the various negative and positive impacts of the same on the
organization along with their outcomes. It is also summarized from this report from a critical
study of the organizations and the factors responsible for its success, about the response in the
concern of pollution occurring due to usage of plastics and reducing it through usage of
biodegradable cups. This is being positively adopted by the company and also various plans has
been implemented in this regard. Along with this, recommendations for enhancing the response
has been given which includes various schemes such as 'latte levy' and discounts by the
Starbucks.

REFERENCES
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Online
Starbucks Falls Short on Environmental Commitments. 2017. Online Available
Through:<https://www.sierraclub.org/sierra/starbucks-falls-short-environmental-
commitments>.
Starbucks global supply chain and climate change. 2017. Online Available
Through:<https://digital.hbs.edu/platform-rctom/submission/starbucks-global-supply-
chain-and-climate-change/>.