Comparative Analysis of Management in Rosalind Caf� and Starbucks

This report provides a comparative analysis of the management practices employed by Rosalind Caf�, a small UK-based chain, and Starbucks, a global multinational corporation. The study examines key aspects of management, including leadership styles, decision-making processes, communication strategies, organizational culture, business ethics, and corporate social responsibility. The report explores the differences in approach between the two companies, considering factors such as business size, organizational structure, and geographical reach. The analysis delves into the roles of managers, the methods of communication, and the influence of stakeholders on decision-making. Furthermore, the report evaluates the strengths and weaknesses of each company's management practices, ultimately providing insights into which organization would be preferable for both customers and employees. Finally, it offers recommendations for improvements in both coffee chains.

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Management

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Abstract
The following report gives a comparative study of the management practices being presently
followed by UK based small café chain Rosalind and the world-renowned Starbucks. The results
of this analysis have been used to determine which of the two café is more effective in serving as
an employee and the one as a customer.

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Table of Contents
Introduction ..................................................................................................................................... 4
Comparative Study (Rosalind Café and Starbucks)........................................................................ 5
Management and Manager’s Role .............................................................................................. 5
Communication and Decision Making ....................................................................................... 7
Organizational Culture .............................................................................................................. 10
Business Ethics and Leadership ................................................................................................ 12
Corporate Social Responsibility ............................................................................................... 16
Preference ..................................................................................................................................... 17
a) To be a Customer ............................................................................................................... 17
b) To be an Employee ............................................................................................................ 18
Recommendation .......................................................................................................................... 18
References ..................................................................................................................................... 20

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Introduction
The report aims at evaluating the management practices of Rosalind, a small café chain in UK
and Starbucks, a multinational, in order to draw a comparative analysis. Both the companies are
in the same industry but there are various differences between them. The business size is
different, products offered; management, culture, ethical standards, communication modes, etc
are absolutely dissimilar. This study would be initiated with a brief overview of both the coffee
chains. Further, a comparative analysis would be done to evaluate the management and
manager’s role, communication and decision making, organizational management and culture,
and business ethics and leadership. Based on the discussions, it would be decided as to which
coffee chain would be chosen to be a customer and which would be chosen for being an
employee. Recommendations would also be suggested for the coffee chains for the limitations
they have
Rosalind’s Café was first launched in a city which was forty miles away from London in the year
2006. Henry and Fiona Owen are the owners of Rosalind’s Café, and now their son Ed takes care
of the managerial functions in the Café. The café sells coffee, cooked food such as soups, ice-
creams of various flavours, coffee, tea, and other snacks. The café has also expanded within the
country and have opened up few more shops in different places round the city. On the other
hand, Starbucks Corporation is a US based company and is engaged in the business of
purchasing and roasting whole coffee beans. It is an international player and is regarded as one
of the premier brands of specialty coffee retailing in the world. It operates in about 61 countries
and has more than 20,366 stores (Starbucks Corporation, 2012a). Starbucks have a very
prestigious image in the market and is itself a brand around the world. Starbucks was established
by Jerry Baldwin, Zev Siegl, and Gordon Baldwin in the year 1971. It sells both cold and hot

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drinks, such as beverages, salads, sandwiches, snacks, pastries, coffee beans, and also other items
like mugs, tumblers, etc. The revenue generated by the company in the year 2012 is $13.29
billion, and the operating income is $1.99 billion. The total number of employees is 149,000 till
2011. Starbucks was also the first to introduce the system of Starbucks Express, which is an
online ordering system. The customers through Starbucks Express can place their order online
and when they visit the store; their order would be served instantly.
Comparative Study (Rosalind Café and Starbucks)
In this section, a qualitative comparative analysis would be set to examine different aspects of
Rosalind’s Café and Starbucks. The approach of qualitative analysis through meaningful
comparison was developed in 1987 by Charles Ragin (Rihoux, 2012, p. 679–706). This approach
is mainly utilized for resolving problems and also for investigating the factors on which
comparison can be drawn. The qualitative comparative analysis of the issues and factors
associated with Rosalind’s Café and Starbucks would facilitate in making preferences. Rosalind
Café offers best services, high quality and tasty food, like any international coffee shop or café,
whereas, Starbucks is known for its premium quality beverages, and exclusive menu. They also
focus on the ambience and interior designs of their coffee shop. In the same manner, there are
various dissimilarities which can be highlighted between Rosalind’s Café and Starbucks through
a comparative analysis.
Management and Manager’s Role
In order to draw a contrast between the management practices of Rosalind’s Café and Starbucks
and appraise the role of their managers, the first criteria is to comprehend the intricacies of the
management and role that a manager plays in the multifaceted framework of management in

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organization. The managerial activities are complex and enhance with opportunities. The
managers have the responsibility to deliver four specific responsibilities in the complex business
environment, such as planning, leading, organizing, and controlling. Companies utilize many
resources to pursue their objectives or goals, but without appropriate assistance from the
managers, this task is impossible (Griffin, and Moorhead, 2011, p. 7). The management
functions which come under the control of the managers are human, physical, financial and
informative in nature. Managers have the responsibility of combining these resources to
efficiently attain the goals and utilize the resources skilfully. Here the differentiation is between
a small firm, which is Rosalind’s Café and a multinational called Starbucks. Management begins
with planning, and in case of small firms, an indistinct approach is modified to start the business.
Managers in such firms are generally busy with the day to day functions or operations because
the resources are limited (Clegg, Kornberger, and Pitsis, 2011). Other than this, firms also have
to avoid financial losses and adapt to the changes in the market, so managers plan out strategies
to avoid wastage and optimize the usage of resources, so that financial and human capital is
utilized appropriately (Sabharwal, n. d.). In Rosalind’s Café Ed, the son of Fiona and Henry
Owen was the manager. James was the manager for the other café chain of Rosalind’s Café.
Fiona and Henry Owen have given enough flexibility to Ed and James to take on operational
decision. Generally it is seen that manager in small businesses do not have enough liberty to take
decision and implement them too. However Rosalind’s Café is a family owned business and the
manager being the son of the owner is trusted and allowed liberty to take on operational decision,
but the few specific managerial decisions are still taken by the owner.
On the other hand, the managers in the multinational firms have to have certain special qualities
which can be ignored in the managers of the small firms at domestic levels. The multinational

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managers need to have knowledge regarding the culture of the country in which the company is
operating, the language, and external environment. They must maintain the corporate mission,
vision and objective of the company. They are carefully recruited to maintain sustainable
relationship with the corporate headquarters, despite of being located at any part of the world. A
multinational manager should have a long term perspective and focused approach towards his/
her goals (Cohen, 2012). Similarly, Starbuck Corporation is a multinational firm which includes
the Cafe chain of Starbucks and II Giornale. Howard Schultz was the CEO of this company.
After the merger of both of these Café chains under Starbucks Corporation, Schultz decided to
integrate suitable human resource and management policies to expand and develop the brand
Starbucks. He decided to include the employees in the decision making process, which led to the
eradication of trade union from Starbucks. The store managers were recruited on the basis of few
specific criteria such as he/ she should have strong love and passion for coffee, and who can
easily adjust to diverse culture because diversity is an integral part of being a multinational.
They recruited managers who loved their job and the true reflection of such a feeling reflected in
their behaviour.
Communication and Decision Making
Strategic Decision making is crucial for making feasible choices for the firm, as these selections
affect the well-being and the survival prospects of the small firms (Schoemaker, 1993, p. 107).
These decisions assist the owner or entrepreneur of the firm to shape the course in future. In the
studies, two viewpoints for decision making are usually discussed; first is the rationality bound
and second is politically bound. In rational perspective, the decision is usually taken by an
individual and he/she have information regarding the whole situation and know how to react in
it. In case of political perspective multiple viewpoints are involved in the decision making

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process (Gibcus, Vermeulen, and Jong, 2006; Linstead, Fulop, and Lilley, 2009). In case of
Rosalind’s Café, the decision-making process functions on rational basis because Ed and James
were the managers, but the real decision-making was in the hands of Fiona and Henry Owen.
They took most of the decision and decided the course of the business because Rosalind’s Café
was a small family business started by Fiona and Henry, and they knew best about the finances
and operational division of the business. The decisions for expansion in 2010, sell salted beef, or
introduce ginger beer in the café, were all made by Fiona and Henry. Employees were
considered important but the actual decision-making power was with the owners of the café.
Decision making in multinational companies are done on political basis because in multinational
companies there are various people who have the authority to take part in vital decision making
process of the company and because a single decision affects all the stakeholders of the
company. In Starbuck, the CEO was Howard Schultz, who was responsible for the taking the
major decisions in the company, yet he was answerable to the stakeholders for his decisions.
Schulz included the employees too in the decision-making process of Starbucks in order
eliminate the barriers arising out of trade union. The investors and shareholders of Starbucks
Corporations were the major decision-makers. Schulz and his board of directors were responsible
for planning and developing the strategic framework, and approval was taken from the
stakeholders. Major decision like expansion of Starbucks, employee health care programmes,
usage of skimmed milk in the cappuccinos were all vital decisions which were taken on the basis
of investors’ opinion, employees’ demand, customers’ preferences, shareholders’ interest and on
the suggestions of the board of directors.
Managing communication is a logical process which includes preparation, execution,
supervision, and amendment of the channels of communications. The managers’ duty is to

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persistently communicate the employees and other stakeholders of the company. In small
organizations or firms interpersonal communication is of primary importance. Exchange of
opinion and information among the employees, from the owner to the employees or vice versa,
and also with the customers is important (J. A. Pauley, and J. F. Pauley, 2009, p. 21-25; Fielding,
2006, p. 18-26). In Rosalind’s Café the channel is communication flows from Fiona and Henry
to Ed and Ed manages and monitors other managers like James, or Gina, and the other
employees in the Café. Issues related to the menu of the Café are taken care of by Ed in a
management meeting which includes all the employees of the Café. So in small firms,
transparency in communication is vital, and the management at Rosalind’s Café tries to do it by
training employees themselves and the recipes in the Café are passed on from one staff to
another like an asset of the Café. Fiona and Henry want to communicate with their customers
through their superior offering. Small firms do not spent must on promotion, but they want to get
recognition through their products and services. In case of Rosalind’s Café, the same theory is
applicable.
Communication framework is designed and developed in the multinational companies, keeping
in mind various significant factors. In the multinational firms, the workforce is diverse; they
come from different countries and also speak different languages. Apart from this, the operations
of the company is also spread in various parts of the world, so just interpersonal communication
on individual basis is neither possible nor feasible. In order to make the internal communication
framework effective, even IT integrated solutions are implemented for faster and efficient
services (Born, and Peltokorpi, 2010, p. 97-118). Schultz believed that communication skill
should signify what is stands for rather than what it offers. Starbucks stands for passion,
ambience, brand experience, rather than just coffee, tea or snacks. Multinational firms establish

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its major communication channel with its customers. Starbucks does not present itself as a coffee
shop, but it depicts that it is into people business which deals in relationship building. They serve
over sixty million customers in a week and recruit hundreds of employees to serve them, so this
proves that they are in people’s business selling coffee. The motive was to build a third place
between office and home, which is interesting and motivating for people. Internally
communication flows from one level to another. Since Starbucks have shops around the world
and several hierarchies, the information flows from top to bottom level. Employees were also
offered shares of the company for treating them as partners and they were allowed to take part in
the managerial decision making process. In multinational firms, the employees are not just paid
workforce, but stakeholders of the firms too, as discussed in case of Starbucks (Gallo, 2011).
Organizational Culture
According to Martin and Siehl (1983), organizational culture is nothing but shared beliefs,
values, attitude and customs that are followed within the organization. Deshpande, Farley, and
Webster (1993), argued that organizational culture assists an individual to recognize
organizational function and makes them aware of the custom to behave in the organization.
O’Reilly, Chatman, and Cladwell (1991) depicted that organisational culture is characteristics of
the organization. Since Rosalind’s Café was a family owned business, the culture within the
organization was homely. The employees were treated like members and they were even taught
to make perfect Rosalind coffee and other items by the managers and sometimes by the owners
themselves. The recipes were like tradition that was transferred from one staff to other in
Rosalind’s Café. However, for the customers Rosalind did not offer ambience, but they only
offered products for their customers because Rosalind’s owners either want their customers to
buy drinks, coffee or food, otherwise occupying the table for long time is not appreciated. Even

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the customers cannot demand for slow music or for any customization. Fiona and Henry Owen is
very stick is offering what they feel is right rather than what the customers’ requirements are. So
the internal culture of Rosalind is its strength, but the culture that prevails concerns the customer
is its weakness.
The corporate culture of multinational firms is made up of diverse opinion, beliefs and values. It
is made up of certain core ingredients like diversity, tolerance, acceptance, uniformity, etc. The
culture of Starbucks is strong enough to reach every corner of the firm, and it even reaches
outside the domain of the organization. After a complete review of the organizational culture, it
can be said that Starbucks is successful because of its appealing cultural model. The appeal in
their business model is because Starbucks is a global entity, and it offers quality products all
round the world. The customer service is excellent as they are greeted by enthusiastic employees,
who are always happy to serve and are knowledgeable regarding the product, its ingredients,
nutritional value, etc. Rarely does a customer of Starbucks return dissatisfied, so it is clear that
the employees’ strive to offer best possible service to the customers. Starbucks sells ambience,
and not primarily coffee. They do not want their customers to just come have something and
quickly vacant the seat and go away. Starbucks has positioned them to be a place between home
and office. A company offering products as well as services must not neglect the service part
because when it comes to serving people, special attention has to be paid. Starbucks values and
missions are clearly prevalent from its cultural behaviour. If the internal organizational culture of
Starbucks is analyzed, it can be seen that Starbucks encourages the enthusiastic development of
the employees. Special appraisal schemes, employee health benefits, and other activities for the
training and development of the employees are organized at Starbucks. Starbucks is also
involved in many corporate social responsibility (CSR) activities for the society. The company

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maintains a spiritual culture that states the performance of the company towards its customers,
employees, suppliers, and community. The organizational culture of Starbucks is a mixed bag of
diversity, employee enlightenment, fair trade, values and relationship building, and passion.
Business Ethics and Leadership
Business ethics is the applied ethics, ethical principles, or ethical problems that arise in the
business environment. This is applicable to every aspect of business, including the individuals in
the organization. There are two dimensions of business ethics such as descriptive and nominative
dimension. The corporate practices are usually considered nominative, while scholastic attempts
to explain business behaviour is called descriptive technique. Issues such as profit making and
maximizing behaviour, non-economic aspects, and other issues are reflected through business
ethics (Grey, 2009). Adam Smith explained that people in the same business never meet even
during enjoyment, but they always discuss about each other in order to show themselves greater
than their competitors. These are certain ethical issues that are discussed while considering
ethical standards in business (Fisher, and Lovell, 2012). It simply implies certain behaviour
which is beyond the control or preview of the government or regulatory body.
It is easier to maintain ethical standards in the small firms than it multinational firms because it
case of small firms, all the operational functions takes place under the jurisdiction of the owner,
but in case of multinational firm, a regulated ethical framework is prepared to set standards for
every division of the company. In case of small business, the ethical nature can be segregated
into three specific divisions, namely legitimate business, enterprise performing criminal activities
and enterprise or firm operating in the grey areas. Although the firm is functioning legally, yet
certain unethical practices might hamper the image of the firm, which is not illegal. Rosalind’s
Café functions on the ethics of providing good quality, delicious menu and beverages to the