Importance of Organizational Culture in Business

This report discusses the importance of organizational culture in business and its impact on performance and employee satisfaction. It covers topics such as SWOT and PESTLE analysis, CSR influence on business, leadership styles, and the significance of maintaining a strong organizational culture. The case study focuses on Starbucks and its global presence in the coffee industry.

CONTEXT OF BUSINESS

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1. SWOT and PESTLE analysis..................................................................................................3
2. CSR influenced the business...................................................................................................5
3. Leadership styles.....................................................................................................................6
4. Importance of organizational culture.......................................................................................8
5. Reflection.................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In business there has to be analyses of internal and external factors of the organization
does make a lot of difference in the working of the business which needs to be maintained in the
organization so that the company can have higher reputation. Starbucks was established in 1971
and is having its headquarters in Washington, United States. The company is having 28,218
locations being from public coffee industry and is serving worldwide so that the company can
have higher profit margins. The net income of the company US$4.51 billion as of 2018 and
products which Starbucks is offering are baked goods, tea, smoothes, sandwiches and coffee
beverages. In the report there is a discussion on how organizations must analyse the functioning
and styles which the organization must use so that there is going to be better operations and
performance. Report would also discuss the culture and CSR of the business will have to be
analysed and the company must have good functioning so that they can compete in the market
effectively.
MAIN BODY
1. SWOT and PESTLE analysis
Starbucks will have to analyse their external and internal factors so that they can gain
competitive advantage for a better functioning. To make the company have better decisions and
planning for the future there has to be good understanding and functioning which is going to be
present for the best. The further report consists of the internal and external analyses of Starbucks
in detail.
SWOT
 Strength
The company has gained a brand image for themselves by providing the customers with
premium quality of services and products in the organization (Hutchins and et.al., 2019). The

company is having global presence and the brand image of the company is very strong which is
why the company is being able to expand themselves further.
 Weaknesses
The company is not spending much on marketing of the organization and is dependent on
word of mouth method which is getting in limited customers. The pricing of the products and
services are also priced premium which is focused on the high class society and the company
will not be able to grow further in the market with this method.
 Opportunities
The organization can use digital marketing so that the organization will be able to engage
with the customers and make the company have higher connections globally. The Asian market
is huge which the company can take advantage of so that Starbucks will be able to get
competitive advantage and sales.
 Threat
There is a growth in the competition, of beverage industry which can take away the
shares of the company in the market. There is a lot of pressure which the company is going under
and making the efficiency also reduce and so are the customers trending changes are not being
able to be followed in the organization (Tuan and et.al., 2019).
PESTLE
 Political Factors
The company is having more than 30,000 outlets globally by following all the laws and
regulations of different countries so that the portfolio of the company is going to remain strong.
The company is trying to expand themselves in developing countries like India which are having
free trade policies and that can be a great advantage for the organization.
 Economic Factors
The wages of the labour working in the company makes a lot of difference in the economic
factor of the organization. Starbucks is focusing on the premium customers which are adding

limitations on the business which is not good for a long run. The competition in the market is
high which is why the organization will have to find alternative ideas to functioning better.
 Social Factors
The product range is well established by the organization in the market which is why the
organization will have to focus on the trends which are coming in the upper class society. The
company will have to make the demands of the customers be fulfilled so that the organization
can operate effectively (PESTLE Analysis of Starbucks, 2019).
 Technological Factors
For Starbucks being technology friendly is very essential so that there is going to be a good
advantage. There are a lot of discounts which the organization is giving to the Apple user
community since they have tied up with them and getting in new customers in the organization
which is making the demands increase.
 Legal Factors
The caffeine consumption of customers is being levelled by the company because there are
harmful affects which this product can do on individuals and the organization does not want to
lose their reputation in the market as well.
 Environmental Factors
The wastage which is being let out by Starbucks is huge and has to be monitored so that
the company is going to be environment friendly. The company will have to follow the
environmental regulations to make the portfolio of the company even much stronger (Brunk,
2020).
2. CSR influenced the business
CSR is a business model for self regulation so that the company can have good social
accountability. CSR is a very important factor which is very important in the market today on
which the business environment is dependent upon. There are a lot of methods which can be

used by the organization to increase the satisfaction level of the customers so that there is going
to be good functioning which is going to be present for the organization (Yusoff and et.al.,
2019). Starbucks is already having a strong portfolio and a strong base but they will have to work
on their environmental factors so that there is going to be zero carbon footprints which would be
present in the organization. This would help Starbucks to be able to maintain their reputation and
brand image in the market which make the customer base and market share be maintained by the
company. The businesses in the market have to work on their CSR so that there is going to be
good functioning and positive significance is going to be present which makes the company
increase their sales and working in the market. CSR is also going to help Starbucks have a
motivated and workforce who is going to help the company have a higher productivity and the
demands of the customers is going to be matched for better functioning (Stiegler, Heinemann
and Bussian, 2016).
Starbucks has taken a lot of measures to make the company environment footprint
reduction and they would be inspiring the other businesses to do the same as well. This is a very
important factor for the company because the government has also made regulations which the
businesses must follow and the company has already taken measures to be able to balance that.
To have sustainability in the market is the aim of Starbucks in the market so that the company
will be able to make the stakeholders also be interested and ready to invest further in the
organization which is going to be more profitable for the company (Siemieniako, 2018). There
are renewable resources which the company is using so that the demands of the customers are
going to be fulfilled from time to time for higher functioning. There are a lot of programmes
which the company has adopted so that they will be able to control the CSR in the organization
and monitor them as well which is going to make the company have good functioning for a long
run. The competition in the market is also increasing which is why it is very important for the
company to be able to maintain this factor so that there is going to be good functioning
(Lubberink and et.al., 2017). The customers have to get the best and for that the company will
have to make the environment good enough to get the deliveries on time so that the customers
are going to receive the best of products and services as well which is going to be very good for
the overall growth in the market.

3. Leadership styles
There has to be good functioning and management of the changes which are coming in the
organization so that there is going to be a good growth which is going to be present in the
organization. There are different styles which can be used by the organization in order to be able
to get in those changes for the best of the organization (Smit, Zoet and Berkhout, 2017). The
different styles of leadership are autocratic, democratic and Laissez- faire which is going to be
discussed in the further report.
 Democratic
The decisions are made considering the point of view of the employees as well because the
decisions are made for the company which have to be followed by the employees eventually. The
business will have to consider all the point of views and then take the best decision from that.
This is going to reduce time management for the decisions process but the end result is going to
be very good for a long run. There are a lot of ideas and new innovations which can develop in
this process and Starbucks can have a unique identity for themselves in the market making the
portfolio of the organization even much stronger for the best.
 Autocratic
In the decision making the management does not involve the employees of the organization
but take the decision on behalf of them. The employees have to follow the leaders blindly and
that can make the productivity and new ideas to be generated minimised. This is not a good
factor for Starbucks since the company wants to gain more customers and make the sales of the
products increase (Comparison of leadership styles & their impact on team performance, 2017).
As much as the employees are going to be controlled they are going to feel more pressured and
will not be able to match the standards of the company as well which is not good for the loyalty
of the customers.
 Laissez-faire
The decisions are left on the employees directly and the leaders and management only
provided them with the guide lines which they have to follow so that there is going to be better
functioning present in the organization for higher performance. This is going to increase the

loyalty of the employees because they will be able to work according to themselves but the
decision making is going to be slow (Jamel, Saidani and Nurcan, 2018). Less skilled employees
will not be able to operate effectively in this condition and can impact Starbucks in a negative
manner.
Starbucks will have to use democratic style of leadership so that there is going to be a
satisfaction level of the employees in the organization so that the demands of the customers is
going to be matched and so is the quality of the products and services of the business. The
employees of Starbucks are not well satisfied which is affecting the customer’s loyalty with the
company as well which has to be maintained. The company needs to make the sales and profit
margins increase and for that the organization will have to take these decisions for the best of the
company.
4. Importance of organizational culture
There has to be a strong internal factors of the organization which includes the workplace
as well and that has to be maintained so that there is going to be good functioning. The
employees have to be given a healthy and secure environment to work in so that there is going to
be higher performance in the market. There are guidelines which are present in the market for the
employees which are working in the market so that there is going to be good functioning and
Starbucks will have to make the internal factors better so that the employees are going to have
better functioning (Zhu and Zolkiewski, 2016). There is an expectation of the employees as well
from the organization so that there is going to be better operations and the sense of direction is
also going to be present. There is a lot of improvement which Starbucks will have to get in the
policies and monitor the employees as well so that the internal environment and culture is going
to be maintained. The employees have to be given their rights in the company like right to
equality and discrimination or any other factor which can make the productivity reduce of a
business. The organizations in the market follow these policies to make the culture of the firm be
maintained so that there is going to be more sales and higher profits.
The chain of this coffee organization has to not just sell products, but also the food and
beverage products and make the experience of the customers better so that there is going to be

better operations. The structure of the company has to be strong so that the organization is going
to have a good communication and the culture which is the values, beliefs and tradition of the
employees can be maintained in the organization. The morale and retention rates of the
employees have to be sustained in the company so that there are going to be skilled and
knowledgeable employees which are going to be present in the business so that there would be a
growth in the market. The power, politics and culture of the business are the backbones of
business which have to be controlled and monitored so that there is going to be good and
effective working which would be present in the organization. There is a consistency which in
the activities and other working of the organization which makes the employees not feels good
about the working which can impact the organization to have a greater functioning which is
going to make the company have higher results (Kretzer and Maedche, 2018). The mission and
vision of Starbucks is very high which has to be maintained and worked upon so that the
company will be able to have a stable working and the organization will be able to compete with
the competitors in the market effectively. The employees of the organization have to be satisfied
so that they are going to be loyal to the business and they also must be goals oriented so that the
company is going to have higher achievements.
5. Reflection
From the report I have learnt a lot of factors like the different styles and measures which
the leaders can take. Businesses in the market have to get in the changes and for that there has to
be good experience and skill to be able to make the decisions effectively so that the company
will be able to benefit. I understood the important of communication and information while I was
doing this report so that I would have better functioning and there is going to be the best of
results which are going to come out of this particular report. Time management is another most
important factor which I have learnt from this report is that the report had to be completed on
time which was given by the professor but there were so many data analyses and information
which I had gathered on the time which made it difficult for myself to be able to make the
decisions for myself effectively. All the businesses have different strengths and factors which
can influence the organization effectively and they have to be analysed well so that there are
decisions which can be made. From the report I understood decisions have to be made effectively

since there are so much of information and getting to one conclusion is very difficult for anyone
but having the confidence to be able to do that there can be good efficiency.
Too much of pressure was felt by me when I was doing this assignment because I did not
have a proper direction to go about with this report which is not good. Confidence comes when
there is excessive of information on one topic but there is going to be a lack of interpretation of
the same knowledge in front of others with no confidence to communicate (Andone and
Frydenberg, 2019). There must be good performance and understanding which everyone must
have so that there is going to be good results. I wanted the best to come out of me when I was
doing the report because I thought I have a lot of knowledge on the topic and when I started to
collect the data, there were so many new topics and information which I received from the report
were excellent. The influence of my knowledge is not present in the report but the influence of
the knowledge I have gained from primary and secondary resources are present in this file. There
are a lot of opportunities as well which were provided to me in this report and the control of my
attitude towards this topic was very positive and negative at the same time. Over confidence is
never good which I realized before starting the report which is a great factor (Yusoff, Omar and
Zaman, 2019). Clear planning had to be done when the deadline of the report was approaching
which is very important for me because there had to be a good result and for not getting negative
marking I had to decide very quickly about the information which should be presented in this
report and which should not be. I would say that I am not that well satisfied with the result of the
report because in going a work quickly is never satisfactory and the best is not going to be
reflected in the work according to me.
CONCLUSION
From the above report it can be concluded that the businesses in the market will have to
have good culture and beliefs so that they can operate effectively and perform well. Leaders of
the organization have to get in changes effectively keeping in mind about the employees by
using the right styles so that there is going to be better functioning. To make any changes and
make the organization get a competitive advantage for which the organization will have to
understand the internal and external factors. There has to be good CSR balance which is going to

make the company have a strong portfolio and brand image in the market. The company can
increase the sales by satisfying the employees and the customers at the same time which is a
great factor for the company to have for a long run.

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%20Analysis%20of%20Starbucks%20%201%20Political,was%20the%20primary
%20customer%20base%20of...%20More%20 >.