Starbuck Company Background (PDF)

Starbuck company background
Starbucks Corporation is
an American espresso
organization and cafe
chain. Starbucks was
established in Seattle,
Washington in 1971. The
name is enlivened by
Moby Dick's initially
mate. This name and
the mermaid logo were
roused by the
adoration for the
ocean, from
Starbucks unique area in
Seattle Washington in

the core of Pike Place
Market. Beginning as a
solitary shop
represent considerable
authority in great
espresso and
blending items the
organization developed
to be the biggest roaster
in Washington with
various areas until the
point that the mid 80's.
In 1981, current Chief
Howard Schultz,
perceived an
extraordinary

open door and started
working with the
originator Jerry Baldwin.
After an excursion to
Italy
to discover new items,
Schultz understood a
chance to bring the
bistro group condition
he
found in Italy to the
Unified states and the
Starbuck's image we
know today started to
take

frame. Offering coffee
by the container was the
principal test. Schultz
left Baldwin to open
his own particular Italian
café Il Giornale which
discovered ludicrous
achievement and in
1987 when Starbucks
chosen to offer the first
6 areas, Schultz raised
the cash with financial
specialists and acquired
the organization and
intertwined them with
his Italian bistro areas.

The organization
experienced quick
development opening
up to the world in
1992, and
growing ten times by
1997, with areas around
the Assembled States,
Japan and Singapore.
Starbucks additionally
started extending its
image. As indicated by
George Garza in his
article the historical
backdrop of Starbucks

the accompanying
product offerings were
included:
 Offering Starbucks
espresso on Joined
Carriers flights.
 Offering premium
teas through Starbucks'
own Tazo Tea
Organization.
 Utilizing the Web to
offer individuals the
choice to buy Starbucks
espresso on the
web.

 Circulating entire
bean and ground
espresso to stores.
 Delivering premium
espresso frozen yogurt
with Dreyer's.
 Offering Compact
discs in Starbucks retail
locations. Starbucks
utilizes insignificant
promoting and has
developed on verbal
exchange and brand
acknowledgment. As per

Garza by 2004
Starbucks had achieved
1,344 areas. (Garza)
 Today, as per the
Starbucks site, they
have 23,763 stores (as
of November, 2016) in
50
nations. In 2009 they
made endeavours
socially as they
opened the
Agriculturist
Bolster
 Centre in Kigali,
Rwanda and turned into

the world's biggest
purchaser of Reasonable
Exchange Certified
espresso.
Starbucks Corporation is
an American espresso
organization and cafe
chain. Starbucks was
established in Seattle,
Washington in 1971. The
name is enlivened by
Moby Dick's initially
mate. This name and
the mermaid logo were
roused by the

adoration for the
ocean, from
Starbucks unique area in
Seattle Washington in
the core of Pike Place
Market. Beginning as a
solitary shop
represent considerable
authority in great
espresso and
blending items the
organization developed
to be the biggest roaster
in Washington with
various areas until the

point that the mid 80's.
In 1981, current Chief
Howard Schultz,
perceived an
extraordinary
open door and started
working with the
originator Jerry Baldwin.
After an excursion to
Italy
to discover new items,
Schultz understood a
chance to bring the
bistro group condition
he

found in Italy to the
Unified states and the
Starbuck's image we
know today started to
take
frame. Offering coffee
by the container was the
principal test. Schultz
left Baldwin to open
his own particular Italian
café Il Giornale which
discovered ludicrous
achievement and in
1987 when Starbucks
chosen to offer the first

6 areas, Schultz raised
the cash with financial
specialists and acquired
the organization and
intertwined them with
his Italian bistro areas.
The organization
experienced quick
development opening
up to the world in
1992, and
growing ten times by
1997, with areas around
the Assembled States,
Japan and Singapore.

Starbucks additionally
started extending its
image. As indicated by
George Garza in his
article the historical
backdrop of Starbucks
the accompanying
product offerings were
included:
 Offering Starbucks
espresso on Joined
Carriers flights.
 Offering premium
teas through Starbucks'
own Tazo Tea
Organization.

 Utilizing the Web to
offer individuals the
choice to buy Starbucks
espresso on the
web.
 Circulating entire
bean and ground
espresso to stores.
 Delivering premium
espresso frozen yogurt
with Dreyer's.
 Offering Compact
discs in Starbucks retail
locations. Starbucks
utilizes insignificant

promoting and has
developed on verbal
exchange and brand
acknowledgment. As per
Garza by 2004
Starbucks had achieved
1,344 areas. (Garza)
 Today, as per the
Starbucks site, they
have 23,763 stores (as
of November, 2016) in
50
nations. In 2009 they
made endeavours
socially as they

opened the
Agriculturist
Bolster
 Centre in Kigali,
Rwanda and turned into
the world's biggest
purchaser of Reasonable
Exchange Certified
espresso.
Starbucks Corporation is
an American espresso
organization and cafe
chain. Starbucks was
established in Seattle,
Washington in 1971. The

name is enlivened by
Moby Dick's initially
mate. This name and
the mermaid logo were
roused by the
adoration for the
ocean, from
Starbucks unique area in
Seattle Washington in
the core of Pike Place
Market. Beginning as a
solitary shop
represent considerable
authority in great
espresso and
blending items the

organization developed
to be the biggest roaster
in Washington with
various areas until the
point that the mid 80's.
In 1981, current Chief
Howard Schultz,
perceived an
extraordinary
open door and started
working with the
originator Jerry Baldwin.
After an excursion to
Italy
to discover new items,
Schultz understood a

chance to bring the
bistro group condition
he
found in Italy to the
Unified states and the
Starbuck's image we
know today started to
take
frame. Offering coffee
by the container was the
principal test. Schultz
left Baldwin to open
his own particular Italian
café Il Giornale which
discovered ludicrous
achievement and in

1987 when Starbucks
chosen to offer the first
6 areas, Schultz raised
the cash with financial
specialists and acquired
the organization and
intertwined them with
his Italian bistro areas.
The organization
experienced quick
development opening
up to the world in
1992, and
growing ten times by
1997, with areas around

the Assembled States,
Japan and Singapore.
Starbucks additionally
started extending its
image. As indicated by
George Garza in his
article the historical
backdrop of Starbucks
the accompanying
product offerings were
included:
 Offering Starbucks
espresso on Joined
Carriers flights.
 Offering premium
teas through Starbucks'

own Tazo Tea
Organization.
 Utilizing the Web to
offer individuals the
choice to buy Starbucks
espresso on the
web.
 Circulating entire
bean and ground
espresso to stores.
 Delivering premium
espresso frozen yogurt
with Dreyer's.
 Offering Compact
discs in Starbucks retail

locations. Starbucks
utilizes insignificant
promoting and has
developed on verbal
exchange and brand
acknowledgment. As per
Garza by 2004
Starbucks had achieved
1,344 areas. (Garza)
 Today, as per the
Starbucks site, they
have 23,763 stores (as
of November, 2016) in
50
nations. In 2009 they
made endeavours

socially as they
opened the
Agriculturist
Bolster
 Centre in Kigali,
Rwanda and turned into
the world's biggest
purchaser of Reasonable
Exchange Certified
espresso.
Starbucks Corporation is an American espresso organization and cafe chain. Starbucks was
established in Seattle, Washington in 1971. The name is enlivened by Moby Dick's initially
mate. This name and the mermaid logo were roused by the adoration for the ocean, from
Starbucks unique area in Seattle Washington in the core of Pike Place Market. Beginning as a
solitary shop represent considerable authority in great espresso and blending items the
organization developed to be the biggest roaster in Washington with various areas until the
point that the mid 80's. In 1981, current Chief Howard Schultz, perceived an extraordinary
open door and started working with the originator Jerry Baldwin. After an excursion to Italy
to discover new items, Schultz understood a chance to bring the bistro group condition he
found in Italy to the Unified states and the Starbuck's image we know today started to take
frame. Offering coffee by the container was the principal test. Schultz left Baldwin to open
his own particular Italian café Il Giornale which discovered ludicrous achievement and in

1987 when Starbucks chosen to offer the first 6 areas, Schultz raised the cash with financial
specialists and acquired the organization and intertwined them with his Italian bistro areas.
The organization experienced quick development opening up to the world in 1992, and
growing ten times by 1997, with areas around the Assembled States, Japan and Singapore.
Starbucks additionally started extending its image. As indicated by George Garza in his
article the historical backdrop of Starbucks the accompanying product offerings were
included:
Offering Starbucks espresso on Joined Carriers flights.
Offering premium teas through Starbucks' own Tazo Tea Organization.
Utilizing the Web to offer individuals the choice to buy Starbucks espresso on the
web.
Circulating entire bean and ground espresso to stores.
Delivering premium espresso frozen yogurt with Dreyer's.
Offering Compact discs in Starbucks retail locations. Starbucks utilizes insignificant
promoting and has developed on verbal exchange and brand acknowledgment. As per
Garza by 2004 Starbucks had achieved 1,344 areas. (Garza)
Today, as per the Starbucks site, they have 23,763 stores (as of November, 2016) in 50
nations. In 2009 they made endeavours socially as they opened the Agriculturist
Bolster
Centre in Kigali, Rwanda and turned into the world's biggest purchaser of Reasonable
Exchange Certified espresso.
MISSION & VISION
Mission
Starbucks mission, vision and value is not about coffee. Most people are surprised to
find out that the Starbucks mission statement has nothing to do with coffee. Their
mission statement from the company profile is as follows:
“Our mission is to inspire and nurture the human spirit – one person, one cup, and one
neighbourhood at a time.
Vision
“To established Starbucks as the premier purveyor of the finest coffee in the world,
while maintaining uncompromising principles as we grow.”

Starbucks Corporation’s Organizational
Culture & Its Characteristics
UPDATED ONUPDATED ON FEBRUARY 20, 2019 BY EDWARD FERGUSON
A Starbucks café in Singapore. Starbucks
Coffee Company’s organizational culture is a critical success factor of the
coffeehouse chain business, especially in supporting its competitive advantages
against other food and beverage firms. (Photo: Public Domain)
Starbucks Corporation’s organizational culture is one of the most distinct
characteristics of the firm. A company’s organizational or corporate culture widely
influences employees and business performance through values, customs,
traditions, and related behavioral expectations in the business organization’s context.
In Starbucks Coffee’s case, the organizational culture permeates all aspects of the
business, including the operations of franchisees and licensees. However, company-
owned stores are where Starbucks Coffee’s organizational culture is most easily
observable. The way café employees work with each other and how they interact
with customers are indicators of the company’s corporate culture. The warm and
friendly ambiance in these coffee shops is part of the company’s cultural distinction
from competitors, which include Dunkin’ Donuts and McDonald’s McCafé. Starbucks
has an organizational culture that relates with the company’s strategies for
successful brand development and the global growth of the franchise and licensing
network, despite challenges tied to economic fluctuations and industry-specific
trends.
Starbucks Coffee’s organizational culture is a key success factor in the business,
considering that the company sells not just its coffee and other food and beverage
products, but also the experience of buying and consuming these products. In this
way, the firm uses its corporate culture as a distinction in the coffeehouse chain
market. Starbucks Coffee’s corporate structure enables optimal application and
observance of this culture throughout the business and its subsidiaries, such as
Ethos Water, Seattle’s Best Coffee, and Teavana, despite differential managerial
approaches used among franchisee and licensee locations.
Starbucks Coffee’s Organizational Culture Type and
Features
Starbucks Coffee’s organizational culture is a culture of belonging, inclusion and
diversity. The combination of the company’s key cultural characteristics is unique

and specific to the nature of its coffeehouse chain business. The internal cultural
situation is reflected through the company’s human resource development programs
and baristas’ interactions with customers. In this regard, the main features of
Starbucks’ corporate culture are:
1. Servant leadership (“employees first”)
2. Relationship-driven approach
3. Collaboration and communication
4. Openness
5. Inclusion and diversity
Servant Leadership. Starbucks Corporation has a servant leadership approach,
which characterizes the behavioral manifestation of the company’s organizational
culture among leaders, including corporate leaders and team leaders. In this
approach, leaders, managers and supervisors emphasize support for subordinates
to ensure that every employee grows in the company. This feature of Starbucks’
corporate culture translates to the employees-first approach. The company highlights
the importance of caring for employees as a way of optimizing employee morale and
customer satisfaction. Former Starbucks President Howard Behar developed this
feature of the firm’s organizational culture because he believed that employees who
are cared for are the ones who care about customers.
Relationship-driven Approach. Starbucks also has an organizational culture that
supports warm and friendly relationships. For instance, at the company’s cafés,
baristas exhibit warm and friendly bonds with each other. This feature of the
company’s corporate culture extends to customers, who are also treated with
warmth. Through this cultural emphasis on relationships, Starbucks develops the
global coffee culture that drives consumer demand for the company’s specialty
coffee products.
Collaboration and Communication. The corporate culture of Starbucks
encourages collaborative efforts through effective communication. At the cafés,
baristas clearly communicate with each other to fulfill orders. Also, they collaborate
as teams to make the order fulfillment process efficient. Thus, Starbucks
Corporation’s organizational culture supports efficiency in business processes, which
contributes to quality of service, positive customer experience, and business cost-
effectiveness.
Openness. Openness is another major characteristic of Starbucks Coffee’s
organizational culture. In the company’s early years, employees had a traditional and
old-fashioned culture of fear in speaking up to their superiors. To address this issue,
former President Behar introduced open forums to encourage employees to ask
questions and communicate with superiors. A culture of openness developed as a
result. Through this cultural feature, Starbucks empowers employees and facilitates
innovation in product development and service provision.
Inclusion and Diversity. Starbucks has an anti-discrimination policy that shapes its
organizational culture. This policy prohibits any form of discrimination based on
gender, race, ethnicity, sexual orientation, religion, age, cultural backgrounds, life

experiences, thoughts, and ideas. Through this feature of the corporate culture,
Starbucks facilitates information sharing and positive rapport among employees, as
well as innovation based on diverse ideas. This cultural facilitation supports
employee motivation and helps minimize turnover. This aspect of the company’s
organizational culture also makes customers feel welcome at Starbucks cafés.
Note on Starbucks Coffee Company’s Corporate
Culture
Starbucks has gone through significant changes in its organizational culture. These
changes are based on issues and problems leaders like Howard Schultz and
Howard Behar identified, especially in the early years of the specialty coffeehouse
chain business. As a way of enhancing business performance, Starbucks instituted
reforms in its corporate culture. Today, the company’s organizational culture is a
distinct characteristic that builds competitive advantage and develops a consumer
population of loyal Starbucks fans from which the business derives stable financial
performance. The main corporate strategic management challenge lies in the
effective implementation of this culture in the human resources of franchisees and
licensees, as these business partners arguably have their own approaches to human
resource management and associated organizational culture development.

Models of Leadership and Managements on Starbucks:
Leadership and management deals with their followers and staff with many various models, several
authors have proposes totally different theories associated with leadership and management
operating models. Starbucks will use these models effectively to limit the poor call makings which
might cause major problem to the corporate. There are many various approaches that may be
assembled into variety of classes to A level, show the modes of that thinking of leadership and
management has evolved traditionally. a number of the models are outlined during this report.
Systems Leadership:
Systems leaders are those people UN agency style ways to an entire system to optimize all kinds of
structure entities (individuals, groups, business units and whole company) for constant nice
performance. Those leaders see the system as an entire and act such the way that it replicates the
attention of the big image. They place their effort to stay their peers across multiple levels and layers
(Fullan, 2005).
Systems Leadership is committed to sterilization the contexts in any respect levels. The leadership
maintains each small and macro views. Systems leadership features a full understanding of macro
level patterns that drive the small level patterns in organization. it's the knowhow of the dynamics at
small level, like the problems of staff and their feelings in functioning at this level. The understanding
of small and macro dynamics permits the systems leadership to know the management of the total
system, not simply a vicinity or a specific level (Heifetz & Linsky, 2009). it'd be necessary for
Starbucks to handle misunderstanding problems that directed to lower performance of the
corporate. Starbucks will figure the output with relation to its internal operations. Management will
check the assembly processes and upon the result, it will appraise the performances of the staff
operating within the company (Mbanote, 2011).Through this approach, management will pinpoint
the loophole within the method chain before some downside will occur. Starbucks management
ought to closely check the productivity scale, If it's declining then it ought to be addressed instantly
with effective higher cognitive process. In 2009, Starbucks baby-faced a heavy loss and seventy
seven drop by second-quarter net profit that resulted within the closing of the many retail outlets
(Flynn, 2009). One major reason behind this set back was because of weak world economy, however
some researchers say that the inner atmosphere of the corporate wasn't sensible in any respect.
However, company managed to regain its standing once more, but
Starbucks endlessly implement this model to make sure the safe company’s future.
it's the duty of the manager to investigate the small and macro aspects of the organization to totally
perceive the total system and work for the betterment of his/her staff which might ultimately
facilitate the manager to achieve the Starbucks goals.
Contingency Theory:
Leaders analyze the condition during which they're concerned then adopt a method that's
appropriate to their specific surroundings. This necessitates the leader to correct his/her vogue to
the condition that he/she faces. The contingent theory was proposes by director (1967) that is
predicated on the 3 main factors:

Leader-Followers relations: the link between the leader and his followers ar designed upon trust that
defines the temperament of the follower that however so much they follow the command of their
leader.
Job Structure: the task structure includes the extent to that the task is clearly delineate and
therefore the normal procedures needed to complete the task on time.
Leader’s Power:
This describes the position of the leader within the company and therefore the degree to that
he/she influence the followers by giving rewards or imposing sanctions. In Starbucks, the
effectualness of leadership is crucial in distinguishing the discontentment of staff in prime level
selections. The contingency model wants leaders to vary with the
situation in order that the company’s performance won't be affected.
Related to this case, Starbucks New island baby-faced decrease within the performance of staff
because of their lack of interest on prevailing state of affairs dealings. In these things, the leadership
ought to take immediate call to strengthen the link with their staff, which might be doable to
encourage them and supply a correct task description to them. an on the spot meeting with the
union leaders and addressing the problems would have unbroken the hopes of the employees intact
and that they would perform with goodwill and potency. Contingency model of leadership is
adopted by my firms as AN structure behavior to contend with worst case scenarios(Zaccaro, 2007)

Starbucks: The Reasons for Its Success
Starbucks' mission is to inspire and nurture the human spirit through
their coffees. To accomplish this mission, the corporate is about to follow
principles that ar used as a guide for his or her staff as they're going
through their daily business. the corporate focuses on the importance of
providing quality merchandise to their customers and creating their
stores snug. it's additionally vital that each one staff treat one another
with respect and dignity. this can be one amongst the explanations why
Starbucks could be a terribly palmy company as a result of staff live to
their mission and make certain that from the CEO to the part-time staff,
there's respect which might be channeled to their merchandise. With
that, the corporate was able to offer quality merchandise and services to
their customers.
Running a corporation as huge as Starbucks additionally came with set-
backs like in 2008 once Schultz was forced to quickly shut over
seven,000 stores to retain staff UN agency knowledge to form the proper
coffee. throughout this point, many stores wouldn't offer the standard
product; the purchasers expect. With that, Schultz created a tricky call to
form certain that baristas UN agency ar obsessed on creating smart
occasional can stay within the company and people UN agency aren't up
to the task cannot destroy the name of the complete. Schultz needed to
confirm the welfare of his customers and additionally encourage the
workers to figure higher.
Leader's Qualities Compared to Path-Goal Theory
The path-goal model specifies a leader's vogue or behavior that edges the
worker and also the work surroundings to realize the team's goal. The
goal is to extend motivation and empower the worker so they'd become a
lot of productive members of the corporate. There ar four path-goal
varieties of leader behaviors, and that they ar directive, supportive,
participative and action. within the case of Schultz, his leadership vogue
fits the behaviors directive, validatory and performance. he's proverbial
for considering the workers as his partners in his business. within the
company mission statement, all staff grasp what's expected of them, and
also the management expects them to perform the task to produce
quality service and merchandise to their customers. Schultz additionally
showed concern for his staff by providing health care and stock choices
for them. With that, he expects that each one staff ought to have the best
confidence in their ability to assist the corporate to grow additional.
Leader's Qualities Compared to Authentic Leader Theory
The authentic leadership theory involves four concepts: awareness,
balanced process, internalized ethical perspective and relative

transparency. it's associate degree approach that emphasizes on building
the leader's believability by making associate degree honest relationship
together with his staff. Schultz builds the support from his staff by taking
care of them and wanting them to boost their performance for the
corporate. Schultz could be a reasonably leader UN agency doesn't
emphasize on the profit however provides a lot of importance to
individuals concerned in his company and also the values and ethics that
he likes everybody to follow. associate degree authentic leader is a lot of
fascinated by empowering his individuals over personal power. Schultz
believes that his staff ar the explanation for the success of his company
and by building a powerful partnership, he will make certain to be a
powerful rival within the trade.

Technical Skills – the ability to apply specialized knowledge or expertise.
All jobs require some specialized expertise, and many people develop
their technical skills on the job. These skills not only involve operating
machines and software, production tools, and pieces of equipment but
also the skills needed to boost sales, design different types of products
and services, and market the services and the products.
Human Skills – the ability to work with, understand, and motivate other
people. the skills that present the managers’ ability to interact, work or
relate effectively with people. These skills enable the managers to make
use of human potential in the company and motivate the employees for
better results.
Conceptual Skills – the mental ability to analyze and diagnose complex
situations. The manager is able to see an entire concept, analyze and
diagnose a problem, and find creative solutions. This helps the manager
to effectively predict hurdles their department or the business as a whole
may face.
Improving people’s skills
Technological changes, structural changes, environmental changes are
accelerated at a faster rate in the business field.Unless employees and
executives are equipped to possess the required skills to adapt to those
changes, the targeted goals cannot be achieved in time.
Improving quality and productivity
Quality is the extent to which the customers or users believe the product
or service surpasses their needs and expectations. For example, a
customer who purchases an automobile has a certain expectation, one of
which is that the automobile engine will start when it is turned on. If the
engine fails to start, the customer’s expectations will not have been met
and the customer will perceive the quality of the car as poor.
Managing workforce diversity
This refers to employing different categories of employees who are
heterogeneous in terms of gender, race, ethnicity, relation, community,
physically disadvantaged, elderly people, etc. The primary reason to
employ the heterogeneous category of employees is to tap the talents and
potentialities, harnessing the innovativeness, obtaining synergetic effect
among the divorce workforce.
Age
Protected under the Age Discrimination in Employment Act, age is a
characteristic often targeted in instances of discrimination. This kind of
discrimination occurs when employers make decisions based on age
stereotypes or preference over merit. For example, if a sales company

actively hires the youngest applicants, this is an example of age
discrimination.
Disability
According to the Americans with Disabilities Act of 1990, employers may
not turn away qualified professionals due to a serious disability. In fact,
many employers may be required to provide reasonable accommodations
for a disabled hire. The document covers businesses with more than 15
employees.
Gender/sex
Sex discrimination occurs when individuals are treated differently based
on their sexual or gender identity. Currently, laws are in place to protect
workers against discrimination based on their sex, but some gender
identities are not protected under these laws. For example, many
transgender individuals find they are not adequately protected under
existing legislation.
Extraversion - is a comfort level with relationships. Extroverts tend to be
gregarious, assertive, and sociable. Introverts tend to be reserved, timid,
and quiet.
Agreeableness - an Individual’s propensity to defer to others. People who
are high on agreeableness are cooperative, warm, and trusting. Low
agreeableness is indicated by people who are cold, disagreeable, and
antagonistic.
Conscientiousness - is a measure of reliability. A highly conscientious
person is responsible, organized, dependable, and persistent. Those who
score low on this dimension are easily distracted, disorganized, and
unreliable.
Emotional stability - describes a person’s ability to withstand stress.
People with positive emotional stability tend to be calm, self-confident,
and secure. Those with high negative scores tend to be nervous, anxious,
depressed, and insecure.
Openness to experience - suggests the range of interests and fascination
with novelty. Extremely open people are creative, curious, and artistically
sensitive. Those at the other end of the openness category are
conventional and find comfort in the familiar.
Power distance - is the degree to which people in a country accept that
power in institutions and organizations is distributed unequally.
Individualism versus collectivism - individualism is the degree to which
people in a country prefer to act as individuals rather than as members of

groups. Collectivism emphasizes a tight social framework in which
people expect others in groups in which they are a part to look after
them and protect them.
Masculinity versus femininity- masculinity is the degree to which values
such as the acquisition of money and material goods prevail. Femininity
is the degree to which people value relationships and show sensitivity
and concern for others.
Uncertainty avoidance - is the degree to which people in a country prefer
structured over unstructured situations.
Long-term versus short-term orientation - long-term orientations look to
the future and value thrift and persistence. Short-term orientation values
the here and now; they accept change more readily and don’t see
commitments as impediments to change.
Physiological needs that include hunger, thirst, shelter, sex, and other
bodily needs.
Safety needs that include security and protection from physical and
emotional harm.
Social needs that include affection, belongingness, acceptance, and
friendship.
Esteem needs that include internal esteem factors such as self-respect,
autonomy, and achievement, and external esteem factors such as status,
recognition, and attention.
At the top of the hierarchy is self-actualization needs; this is the drive to
become what one is capable of becoming, and includes growth, achieving
one’s potential, and self-fulfillment.
The first overconfidence bias. Individuals whose intellectual and
interpersonal abilities are weakest are most likely to overestimate their
performance and ability. The tendency to be too confident about their
ideas might keep some from planning how to avoid problems that arise.
Investor overconfidence operates in a variety of ways. People think they
know more than they do, and it costs them. Investors, especially novices,
overestimate not just their own skill in processing information, but also
the quality of the information with which they’re working.
A second bias is anchoring bias. This involves fixating on initial
information as a starting point and failing to adequately adjust for
subsequent information. Anchors are widely used by people in
advertising, management, politics, real estate, and law, where persuasion
skills are important. Any time a negotiation takes place, so does
anchoring.

3 b Performance Evaluation Systems
Reward Systems
Formal Regulations
System-Imposed Time Constraints
C Enactive mastery - gaining relevant experience with the task or job
Vicarious modeling - becoming more confident because you see someone
else doing the task
Verbal persuasion - occurs when a person is more confident because
someone convinces him that he has the skills
Attentional processes: people learn from a model only when they
recognize and pay attention to its critical features.
Retention processes: a model’s influence depends on how well the
individual remembers the model’s action after the model is no longer
readily available.
Motor reproduction processes: after a person has seen a new behavior by
observing the model, watching must be converted to doing.
Role perception refers to one’s view of how one is supposed to act in a
given situation. We get these perceptions from stimuli all around us—
friends, books, movies, and television. The primary reason that
apprenticeship programs exist is to allow beginners to watch an “expert,”
so that they can learn to act as they are supposed to.
Role expectations refers to how others believe you should act in a given
situation. The psychological contract is an unwritten agreement that
exists between employees and their employer. It sets out mutual
expectations—what management expects from workers, and vice versa. It
defines the behavioral expectations that go with every role. If role
expectations as implied are not met, expect negative repercussions from
the offended party.
The chain rigidly follows the formal chain of command; this network
approximates the communication channels you might find in a rigid
three-level organization. The wheel relies on a central figure to act as the
conduit for all group communication; it simulates the communication
network you would find on a team with a strong leader. The all-channel
network permits group members to actively communicate with each
other; it’s most often characterized in practice by self-managed teams, in
which group members are free to contribute and no one person takes on
a leadership role.

Communication acts to manage member behavior in several ways.
Organizations have authority hierarchies and formal guidelines
employees are required to follow. When employees follow their job
descriptions or comply with company policies, communication performs a
management function. Informal communication controls behavior too.
When workgroups tease or harass a member who produces too much
(and makes the rest of the members look bad), they are informally
communicating, and managing the member’s behavior.
Communication creates feedback by clarifying to employees what they
must do, how well they are doing it, and how they can improve their
performance. Formation of goals, feedback on progress, and reward for
desired behavior all require communication and stimulate motivation.
Communication within the group is a fundamental mechanism by which
members show satisfaction and frustration. Communication, therefore,
provides for the emotional sharing of feelings and fulfillment of social
needs. For example, after a white police officer shot an unarmed black
man in Ferguson, Missouri in 2015, software engineer Carl Jones wanted
to process his feelings through talking with his coworkers at his
corporation. As a second example, Starbucks had baristas write “Race
Together” on coffee cups to start conversations about race relations. In
both cases, the initial communications were awkward—so awkward that
Starbucks pulled the campaign—but Jones and others have forged solid
relationships from their emotional sharing.
Like emotional sharing, persuasion can be good or bad depending on if,
say, a leader is trying to persuade a workgroup to believe in the
organization’s commitment to corporate social responsibility (CSR) or to,
conversely, persuade the workgroup to break the law to meet an
organizational goal. It’s important to remember that persuasion can
benefit or harm an organization.
The final function of communication is information exchange to facilitate
decision making. Communication provides the information individuals
and groups need to make decisions by transmitting the data needed to
identify and evaluate choices. Almost every communication interaction
that takes place in a group or organization performs one or more of these
functions, and none of the five is more important than the others. To
perform effectively, groups need to maintain some control over members,
provide feedback to stimulate members to perform, allow emotional
expression, monitor the persuasive efforts of individuals, and encourage
information exchange.