Principles of Management in Starbucks: Organizational Structure, Leadership Style, and Innovative Management Practices

This study sheds light on the management principles of Starbucks, including its organizational structure, leadership style, and innovative management practices. It also discusses the company's mission, target market, and social responsibility. The study analyzes the controlling process and recruitment and selection process in the company.

Running head: PRINCIPLES OF MANAGEMENT
Principles of management
Nam of the student
Name of the university
Author note

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Table of contents
Introduction......................................................................................................................................3
Mission of the organization.............................................................................................................3
Organizational structure of Starbucks.............................................................................................4
Leadership style used by the company............................................................................................5
Controlling process in the company................................................................................................7
Innovative management practices in the company..........................................................................9
Self-reflection................................................................................................................................11
Methodology..................................................................................................................................12
Conclusion.....................................................................................................................................14
Reference list.................................................................................................................................15

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Introduction
The management principles play an effective role for developing in the company and its
operations in right manner (Wheeler, John and David Dean Richey). The purpose of this study to
shed light on the management principles of Starbucks, which is a renowned coffee chain in the
global market. Highlighting the mission of the company internal situation of the organization has
been discussed.
Mission of the organization
The mission of Starbucks coffee corporation is to inspire the human spirit. The purpose
of the company is to manufacture standard quality of products for providing better experience
(Starbucks.com). The company also aims to introduce uncompromising management principles
in the workplace for maintaining strong organizational culture. Therefore, this can be said that
Starbucks wants to create culture of belonging for maintaining its transparency to the customers.
The target market of a company can be classified into different segments. Analyzing the
target customers of Starbucks, it has been identified that from the demographic segmentation,
Starbucks has targeted the people between 25 to 40 years old. As the company provides standard
quality of products with premium ranges, therefore, upper class and upper middle class
customers are being targeted by the company. Depending on the geographic segmentation, it can
be said that the company has focused on the urban areas, because, due to availability of
transportation, it becomes easier for maintaining the supply chain. On the other hand, it cannot
be denied that psychographic segmentation has higher level of impact on the target market of the
company. The brand fascinated customers have been targeted by the company from
psychographic segment.

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Due to its premium quality of products, Starbucks has developed strong brand image in
the market (Raj et al.). With increasing popularity in the market, numbers of competitors have
been increased. Analyzing the US market, it has been identified that Costa Coffee, café Coffee
day, McDonalds and Dunkin Donuts are the major competitors of Starbucks.
The social responsibility of Starbucks has been developed depending on the environment,
ethics and community. As the company aims to contribute in the community, it provides
training to the youth for improving the social status (Starbucks.com). Different community
stores have been introduced by the company. Not only the community stores, but also different
nonprofit firms have been introduced by the company. On the other hand, it cannot be denied
that the company is ethically committed with the Cocoa, tea and coffee manufacturers.
Environmental protection is being considered as one of the popular social activities of Starbucks
(Starbucks.com). In order to reduce negative impact on environment, the company has
introduced different waste management initiatives.
Organizational structure of Starbucks
Figure: Organizational Chart of Starbucks

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(Source: News.starbucks.com)
Analyzing the organizational structure of Starbucks, it can be said that being a popular
coffee chain in the global supermarket, the company maintains corporate coffee structure. All
areas of business are being influenced by the corporate structure of the company. It is true that
depending on the current business needs, the company has matched its organizational culture. In
the decision making process, Starbucks considers the opinion of each and every employees for
maintaining its organizational standard. Analyzing the operation management in Starbucks, it has
been identified that depending on the areas of decision, different policies and approaches are
being introduced in the company. There are different decision areas in Starbucks, such as quality
management, capacity and process design, location strategy, goods design and services human
resource and job design and supply chain management. As the leadership practices are strong
being followed in the workplace, therefore, this can be said that structure of Starbucks fits in
conventional typologies of organizational structures, which helps to deal with the changes in
the workplace.
Leadership style used by the company
Examining the leadership team in Starbucks it has been identified that Howard
Schultz the chairman, Kevin Johnson the president and chief executive officer, Andy
Adams Kelly Bengston, Luigi Boini the senior vice president and many more are in the
leadership team of the company (News.starbucks.com). Analyzing the internal leadership
culture in Starbucks, it has been identified that the culture of openness is being followed by
the company. In order to motivate its employees towards achieving the goals and objectives,
the company involves the employees in decision making process. It is true that the company
aims to install the servant leadership culture in the workplace so that it will be able to

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develop strong beliefs about the significance of thee engagement of employees in order to
develop successful organization (Starbucks.com).
Communication plays an important role for increasing popularity in the market. In
case of marketing the communication strategies are being implemented depending on the
integrated communication tools (Winkler). It has been identified that the communication
objectives of Starbucks is to increase awareness in the market so that transparent relationship
between the employers and practices in the workplace so that it will become easier for thee
company to increase its sales revenue. Analyzing the communication style in Starbucks, it
has been identified that through advertising, publicity, social expenditure and sponsorship.
With this initiative the company gets the chance to come closer to the customers. Therefore,
it can be said that the favored communication style in Starbucks is being done through social
media.
The term effective communication indicates the process that helps to bring the
organizational development in an appropriate manner (Quirke). In order to manage the
organizational performance, effective communication is required. In case of motivating the
employees towards their job the communication is very important. It is also true that if an
organization will be able to adopt effective communication style, it can help to improve the
organizational culture as well as customer relationship. On the other hand, it is also true that
depending on the communication process, it becomes easier to implement the business plan
in right way. Communication helps to build thee business foundation (Kang et al.). In case of
Starbucks, it has been identified that the effective cultural communication helps the company
to determine the business practices. It also helps to the employees to give their opinion in the

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decision making process. In order to build people’s attitude, effective communication in
Starbucks is needed.
Starbucks follows the effective organizational culture that can be related to the
strategies adopted by the company (Lee et al.). In order to successful brand development
initiatives as we’ll as expanding the business in the global market, the corporate culture of
Starbucks has played an influential role. In order to analyze the key factors of organizations
success, the corporate culture has been considered as the essential component. It is true that
Starbucks coffee culture has distinct characteristics that widely influences thee business as
well as employee performance. By maintaining the friendly and warm culture in the
workplace, the strong cultural ambiance is being maintained in the workplace (Baruah,
Bidyut, and Anthony Ward). The strategic initiatives are being maintained by Starbucks in
case of bringing success in the organization. Analyzing the corporate culture in Starbucks, it
has been identified that the main features of Starbucks organizational culture is it follows the
servant leadership style in the workplace. By following the relationship driven approach, the
company aims to get connected with the customers. Communication and collaboration
between employers, employee and customers are the main features in the Starbucks
corporate culture. By maintaining the openness, Starbucks involves its employees in the
decision making process. Therefore, it can be said that diversity and inclusion are the major
features of Starbucks, which has helped the company to sustain its position in the
competitive market.

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Controlling process in the company
The process of controlling indicates the involvement of information collection system
in a person or group of people. Depending on the controlling process, the company maintains
the performance standard in the workplace. There are various types of organizational
controlling bodies such as HR department, marketing department, operation department and
function department (Thompson). The aim of introducing controlling process in the
organization is to improving the managerial functions so that overall performance quality in
the workplace can be improved. On the other hand, depending on the types the controlling
process can be classified into three parts such as detective control, corrective control and
preventive control (Mitra). Each of the controlling process work to help the company to
achieve its organizational objectives. It is also the responsibility of management to introduce
effective controlling system so that the business objectives can be easily achieved without
compromising with the standard. In case of Starbucks, it has been identified that the
company follows corrective control process. By following this controlling process the
company provides training for avoiding the future risk.
Starbucks follows the four steps of organizational controlling process for managing
the performance deviations in the workplace. In the first step the establishment of standard
for measuring the organizational performance is being discussed. In this process the
managers of the company who are involved in the strategic planning process specify the
operational terms and performance standard to the employees (Thompson). In the second
stage operational manager of Starbucks measure the actual performance of the employees.
Starbucks prepare the formal performance report for understanding the growth of the
employees. Comparing the performance standard of the employees, competitive culture is

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being maintained by Starbucks in the workplace. After analyzing the formal performance
report, the company focused on gaining the business opportunities in the workplace. By
taking the corrective actions, the managers of Starbucks determine the necessary changes.
Information system indicates the set of components that perform to manager the data
processing system (Laudon, Kenneth and Jane). It also helps to support the business
operations of the company that drives the performance standard. The role of information
system is to convert the raw data into information for making it useful for the organization.
In case of Starbucks many information systems are being designed for introducing the
effective organizational process. Analyzing the importance of information system in an
organizational performance, it has been identified that managing the data processing process,
the company can be able to deal with the business practices in the workplace (Heinrich).
Innovative management practices in the company
The term business ethics indicates the business policies that can help to maintain the
professional ethics that helps to deal with the ethical problems in the workplace (Heinrich). By
developing healthy business ethics in the workplace, it becomes easier for the organizations to
control the business environment. It is true that Starbucks has faced ethical issues in several
times. It is true that depending on the racial bias in the workplace, ethical issue has been
aroused in Starbucks. The discrimination between white and black people has influenced the
conflict (Starbucks-canada.weebly.com). In the Canadian newspaper, it was mentioned that due
to its expanding strategy, Starbucks has faced various ethical issues. Due to this reason, the
behavioral issues have been aroused in the workplace, which has increased the customer
complaints (Starbucks-canada.weebly.com). With increasing customer complaints, brand

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reputation of the company was in the tough situation. On the other hand, it is also true that in the
Australian market, Starbucks has also faced the various challenges due to lack of understanding
the coffee culture of Australian people. Due to the rapid expansion policies, the strategic
initiatives of Starbucks have hurt the emotions of Australian people.
Due to the emerging racial bias in the workplace, Starbucks has faced various challenges
in the market. Due to increasing complaints from the customers, the reputation of Starbucks was
in the tough position. In that case, Starbucks has implemented different training initiatives so that
the racial bias can be demolished in the workplace. In that case more than 8000 Cafes were
closed for the training session (Starbucks-canada.weebly.com). By showing a shot film to the
employees, the company tried to enhance the knowledge of them regarding such ethical issues.
On the other hand, in case of sustaining in the Australian market, a research and development
team has been introduced by the company, which worked for understanding thee core coffee
culture in Australia. On the other hand, the company has tried to adopt the slowly expansion
strategy in the Australian market and large numbers of Australian people have been recruited in
the stores for avoiding cultural discrimination (Starbucks-canada.weebly.com).
Recruitment and selection is being considered as the vital part done by human resource
department. Depending on the recruitment and selection process of new employees, performance
standard of in an organization can be analyzed. Generally through different news papers and
authentic websites the job vacancy, post and criteria of the post are being published for dragging
the candidates; attention. After completion of the application submission process, depending on
the qualification few of the candidates are being shortlisted for the interview session. 1st and
second of interview are being done by operation and human resource manager. During the
process quality, ability and communication skills are being judged. In the final round, selected

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candidates are being provided details information regarding salary, job description, working
hours and others official policies. It cannot be denied that Starbucks follows cost effective
recruitment and selection process in the workplace. Depending on the clear idea of customer
demographic region and demands the CVs are being short listed by thee managers. As the main
motive of the company is to provide standard quality of service in the market, therefore,
recruitment and selection process is being done depending on the qualification of the candidates.
Analyzing the global expansion policies in Starbucks, it has been identified that cultural
diversity is the common characteristics in the Starbucks stores (Starbucks.com). Due to its
popularity all over the world, large numbers of employees are being imported from the
developing countries. In that case, the cultural diversity becomes common for the employees.
Some of the cases, due to lack of training discrimination increases in the workplace. However, it
is also true that Starbucks has taken various initiatives for maintaining the cultural diversity. It
has recruited the local people in its stores for developing strong relationship with the customers.
Self-reflection
After analyzing the entire business situation of Starbucks, it has been assumed by me that
Starbucks can be the appropriate place for me to improve my professional graph. Analyzing the
organizational structure of the company, I have understood that a proper hierarchy is being
maintained in the workplace, which is very important for dealing with both thee external and
internal risks. Understanding the diversified organizational culture, I can easily blend myself in
the diversified organizational culture. Being a US resident, it will be easy for me to cope up
myself with the US coffee culture. On the other hand, the leadership style of Starbucks can
influence my creative skills. I will get proper chance to involve myself in the decision making
process, I believe, I can show my creativity to the organization. It cannot be denied that

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Starbucks has established its strong brand image in the global market, in that case, if I join in this
company it can help me to build strong professional graph. Due to diversified culture in the
workplace, it will become easier for me to improve my interpersonal skills. Therefore, in the
above analysis, I can say that Starbucks can be suitable for me to improve both the professional
and personal life of mine.
Methodology
Literature review
In the year 1971, Gordon Bowker, Jerry Baldwin and Zev Siegel founded Starbucks in
the Pike market in Seattle. Three of the founders invested same amount of money for opening the
store. Analyzing the inspiration of the founders, it has been identified that Alfred Peet, who was
the coffee roasting entrepreneur was the main motivator of the founders. In the year 1980,
Starbucks introduced four stores for maintaining the tough competition in the market. in the year
2018, the business revenue of the company reached 24.72 billion U.S. dollars (Statista.com).
Data collection process
Depending on the primary and secondary data the entire research has been done. Using
the qualitative data analysis technique through interview the information have been collected.
The interview has been done on 2 employees in the organization. Detail description of the
interview has been discussed below
Person 1
Q. Do you think the organizational structure of Starbucks can help to achieve its future
goals?

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Answer: As per my understanding, this is the best organizational structure I have ever
seen in an organization. The hierarchy is very much transparent and efficient persons are holding
the right positions.
Q. What is your opinion regarding the organizational culture?
Answer: well I can say that the company follows diversified working culture in the
workplace. I cannot deny that cultural conflicts have seen in the workplace. However, the
cultural conflicts have been easily overcome by the experts.
Q. Do you think working in the organization can impact on your career positively?
Answer: As Starbucks has established strong brand image in the market, it can be a great
option for improving the career graph.
Person 2
Q. Do you think the organizational structure of Starbucks can help to achieve its future
goals?
Answer: Yes, the company has effective organizational structure. It can help to maintain
organizational performance in right manner.
Q. What is your opinion regarding the organizational culture?
Answer: Although Starbucks claims that it maintains a strong diversified organizational
culture, but being an employee with black skin, I have faced various racial issues in the
workplace.
Q. Do you think working in the organization can impact on your career positively?

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Answer: Depending on its strong reputation, I can say it can be beneficial for developing
my career.
In case of promoting its products in the market social media campaign through
facebook, Twitter and Instagram, Starbucks has taken various initiatives. It has developed its
official website www.starbucks.com. Different Blogs have been published through different
news channels like news.starbucks.com, starbucks-canada.weebly.com and many more.
Conclusion
It can be concluded that management principles are being considered as a controlling
process that helps to organize the basic elements of business. It provides correct direction to the
employers for achieving the business objectives. Analyzing the situation in Starbucks, it can be
said that the company can be bale to achieve its goals in the long run.

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