Comparative Analysis of Starbucks HRM in the UK and China

This report presents a comparative analysis of Starbucks' human resource management (HRM) practices in the United Kingdom and China. It explores the application of comparative HRM theories, including neo-institutional theory and national business systems, to understand how cultural, social, and economic factors influence Starbucks' HRM strategies in these two distinct markets. The report examines specific HRM policies and initiatives implemented by Starbucks in the UK, such as loan programs, salary adjustments, and recruitment strategies, considering the local context and employee demographics. It also emphasizes the importance of comparative HRM in a globalized world where multinational enterprises operate in diverse national and social contexts. The analysis highlights the differences in HRM approaches between the UK and China, considering the unique socio-cultural and socio-political dynamics of each country. The report also touches upon the impact of globalization, technological advancements, and the need for effective employee-employer relations in a multinational setting. The report further discusses the importance of adapting HRM practices to suit local contexts and employee expectations, as seen in Starbucks' efforts to address the needs of its employees in both the UK and China. This analysis provides valuable insights into the challenges and opportunities of managing human resources in a globalized business environment.

Running head: STARBUCKS: AN ANALYSIS
STARBUCKS: AN ANALYSIS
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Author Note

1STARBUCKS: AN ANALYSIS
Comparative human resource management practices can be broadly defined as a
systematic method of inspection and investigation which is done to broadly classify and explain
the patterns and variations that are faced and experienced in cross-national and transnational
Human Resource Management system. The respective paper is a comparative analysis of the
human resource management practices of the America based coffee shop chain named Starbucks
in United Kingdom and China. The paper seeks to provide clear and most significant differences
of human resource management process and practices of Starbucks in two different countries and
in two different societies; in United Kingdom and China. Starbucks is a coffee company based in
America and a chain of coffeehouses which currently operates at around 30,000 locations
worldwide. Starbucks was founded in Washington, in the district of Seattle, in 1971 (Koehn et al.
2014). Starbucks has been famous for its latest innovation, “second wave coffee” which focuses
on enhancing the taste, quality and customer preferences by popularizing darkly roasted coffee
among the coffee connoisseurs all over the world. The introduction to “second wave coffee” by
Starbucks has proved to be its main competitive advantage among his peers such as CCD (Café
Coffee Day).
Comparative human resource management has been in a significant position while
analyzing and formulating international human resource management. Every country is different
and unique according to their culture, tradition, beliefs and national identity. A transnational
company or a multinational enterprise is bound to work with different employees from diverse
nationality and ethnic groups. A multinational enterprise functions and operates in various
countries under various national and social dynamics and contexts. Therefore, comparative
human resource management is an important determinant of human resource development for
such organizations (Noe et al. 2017). A comparative human resource management practice is

2STARBUCKS: AN ANALYSIS
considered to be much “broader” than any other human resource practice due to the fact that the
respective practice is “societally embedded” organizational practices which give a clear insight
of the cultural, traditional, ethnic and other social dynamic similarities and differences of the
respective organizations. Comparative human resource management is indeed important and
significant in the global world because it is the field of study that focuses on the ethnic, national
ad nationally influenced institutional differences and distinguishing factors in human resource
management strategies, policies and practices. The respective field of study had earlier emerged
as an independent discipline in the field of international human resource management. However,
in the recent global trends in industrialization, it has come up as an independent field of
management studies (Noe et al. 2017). Though comparative human resource management has
been termed to be a universal and holistic study by the scholars of the United States, however,
the respective field of study intends to preach that human resource management strategies and
practices are well comprehended in the societal context that gives shape to the institutional,
socio-cultural and socio-political aspects of an organization. As far as methodological
preferences are concerned, comparative human resource management stands apart from the
conventional and traditional human resource management. It is because the main motive of
comparative human resource management is to introspect and comprehend national and ethnic
contexts of each individual while formulating the human resource strategies; therefore, it can be
called as a more precise pragmatic view of human resource development. One of the most
significant theories of comparative human resource management can be traced by the concept of
neo-institutional theory. Neo-institutional theory is a school of thought that is formulated to
understand behavior of a particular organization which is and will be manipulated or influenced
by other organizations and much broader and wider forces of social dynamics such as national

3STARBUCKS: AN ANALYSIS
identities and prejudices, cultural and socio-political influences. Neo-institutional theories can be
applied and formulated in micro and macro environment of an organization to understand the
national and cultural waves that influences that particular organization. Neo-institutional
theories are mainly concerned with sociological, anthropological, socio-psychological and
cognitive aspects of a particular organization in the context of a distinguishing nationality and
ethnicity. National business system approach and cross-cultural aspects and perspectives in
management studies are the two secondary theories of comparative human resource
management practices. According to the National Business Systems, the multinational and
transnational companies consider the national institutional concepts to determine what, how and
why the human resource management schemes and strategies should be taken up by the
subsidiaries of them in different countries. The strategies and schemes which the subsidiaries
take while working under transnational or multinational companies are highly influenced by the
national, cultural and sub-cultural jurisdictions of the respective nation where it is functioning or
operating. There has been critical evaluation of National Business Systems in the context of
globalization which had already significantly contributed towards its functions and operations.
Globalization has enabled the companies to operate in different countries with employees and
customers belonging to different paradigms and ethnic diversities. The National Business
Systems has been fueled by globalization and amalgamation of continents together with
technological advancement and it has become one of the latest and most significant factors that
determine how a subsidiary of a multinational company would operate its human resource
development teams to reach the organizational goals and objectives (Noe et al. 2017). It has to be
taken into account that though the coffee company and chain of coffeehouses named Starbucks is
an America based company whose headquarters are in Seattle, Washington, it should not be

4STARBUCKS: AN ANALYSIS
forgotten that the subsidiaries of Starbucks, in United Kingdom and China, has different national
and sociological contexts, therefore, the strategies which the human resource management teams
of the respective subsidiaries are taking up would be completely different than the main
company. The sociological, ethnological, socio-economic, geopolitical and socio-political
aspects of the United Kingdom and China has been taken into consideration while formulating
the HR policies and schemes because of the diverse, heterogeneous and multiple composition of
employees and professionals. Every ethnically diverse employees, experts and professionals who
work under a company have their own sets of ethics, objectives, professional goals and other
factors such as social roles played by them that subsequently affect the productivity of the
employees as well as the organization. To tackle such situation, a proper comparative human
resource management team is utmost needed for a smooth and balanced functioning of the
organization and employee-employer relations.
Starbucks in United Kingdom
Starbucks is a famous chain of coffee shops which had originated from Seattle, United
States and an outlet of the respective company has been opened in the United Kingdom as well.
Before coming to the point of the human resource management strategies of Starbucks, the
position and reputation of Starbucks in the United Kingdom has to be considered and discussed
first. Apparently, the United Kingdom news departments have been constantly highlighting the
news of tax avoidance by Starbucks recently. The debate about tax avoidance executed by
Starbucks has been subsequently and significantly affected its ethics and corporate goals and
objectives. Most of the businesses which performs overseas and in a multinational arena has the
corporate objectives to increase and maximize the values of the shareholders which is assumed to
be resulting in a strategy of diminishing or minimizing the duties and taxes that the company is

5STARBUCKS: AN ANALYSIS
bound to pay while functioning all around the world. However, the reluctant attitude of
Starbucks Company in paying the taxes levied on them by the United Kingdom has subsequently
resulted in an obnoxious reputation and negative publicity of the respective company up to
certain extent.
Starbucks Company in the United Kingdom has introduced certain modified strategies,
rules and regulations, laws and policies in human resource management arena for the staff and
the employees. Starbucks has been providing monetary incentives to its employees and staff for
increasing their morale and improvement in their productivity and attitude towards work in the
organization. Starbucks has launched loan programs exclusively for the employees of its
subsidiary, who are under 25 years of age in the United Kingdom (Ferreira 2017). The name of
the respective program is “Home Sweet Loans”. Starbucks Company has created a history by
becoming the first private company of the United Kingdom to formulate and implement
charitable undertakings such as housing and homelessness shelters. Such initiatives have been
taken up by Starbucks to help the economically downtrodden employees or the employees
belonging to the marginal sections of the society manage the cost of living in place like the
United Kingdom where the cost of living is subsequently high. Along with the respective
schemes, the company has also extended its basic pay to 7.20 pounds per hour around the month
of April in 2016 to all the working staff and employees, which also included apprentices. For te
experts and professionals who were working in the capital sector of the company are also given
London Premium. The respective schemes and programs have been exclusively given by the
company to the employees who are under the age of 25. Shelter’s Tendency Deposit Loan
Scheme is an undertaking initiated by Starbucks which is a part of “Home Sweet Loan Program”
where Starbucks is making provisions for the employees to get loans that are interest free so that

6STARBUCKS: AN ANALYSIS
they might not face problems while paying rental deposits while they are about to shift into a
new residence. Starbucks has declared itself to be supportive and assistant towards the
government of the United Kingdom’s schemes and initiatives about raising the basic payment of
the working class, which is 9 pounds per hour (Ferreira 2017).
The recruitment policy of Starbucks subsidiary in the United Kingdom is effective and
efficient as it is flexible according to the requirements and preferences of the people of the
United Kingdom, keeping their socio-cultural and socio-political dynamics into the context.
Recently, Starbucks has taken an exclusive Human Resource Policy to make sure that the human
resource team hires the best among all the candidates as employees and turning the respective
candidates more desirably employable as much as they can make it possible. The Human
Resource Management teams are hiring expert career counselors and industrial psychologists to
look into the matter that they assist the employees to develop their career within the organization
and retain in the organization for a longer period of time. The human resource management team
of Starbucks believes that the more they make their employees more versatile and flexible in the
arena of the organization, paving them multiple ways to enhance their career and job designation
within the organization, there is less chance for the employees to leave the organization. It has
been found out that the employable youth of the United Kingdom looks for professions that
would enable them to revisit their core competence that might be used for building national
economic framework and contributing to the GDP (Gross Domestic Product) of the United
Kingdom (Brewster and Hegewisch 2017). The human resource management teams encourage
the employees to consider their past experiences in different areas of profession and they provide
the new employees as well as the existing ones, platform to showcase their extra skills in the
organization to build up their morale and motivate them to work better and be interested towards

7STARBUCKS: AN ANALYSIS
the organization for a longer period of time. They encourage the ever evolving youth and
milennials of the United Kingdom to take part in leadership activities in the organization as well
as in schools, colleges and other institutions that are directly or indirectly involved with the
organization and its operations, to boost and increase their confidence so that their productivity is
also increased, thereby, resulting in improvement of all over performance of the workforce of
Starbucks. The human resource management teams of Starbucks are regularly providing training
sessions and classes for the best and the most efficient employees so that they can be easily
promoted to their desired designation with proper knowledge and skills. The employable
population of the United Kingdom has always been eager to enroll themselves into
unconventional yet prospective professions and this fact is being well utilized by the human
resource teams of the United Kingdom based subsidiary of Starbucks. The candidates and the
employees are being offered different and variety of job designations that would help them
develop their professional as well as cognitive skills. According to the reports on employment
sectors of the United Kingdom, it has been found out that more than half of the population of the
European youths and employable demography, who are engaged in part time activities and jobs,
seek for a secured and a full time job to attain socio-economic stability in their lives. Therefore,
taking the mentioned imbalance into consideration, Starbucks human resource management
teams have been working relentlessly to improve the standards and organizational environment
of the company so that the employees those are hired in the company would be ready to enter
into a full-time employment with them. They make sure that the employees are provided with
proper, comfortable and amicable environment within the organization so that the employees
stick to the organization as full time employees for a longer period of time. Such human resource
management practices have subsequently proved to be providing the company to competitive

8STARBUCKS: AN ANALYSIS
advantage. By utilizing and training the human resources (employees and staff) in the United
Kingdom with efficient and premium training sessions and classes, the human resource
management team has been able to establish a goodwill and reputation in the world of beverage
industries in the United Kingdom. Today, Starbucks is considered to be one of the most
significant chains of coffeehouses in the United Kingdom which has become popular among
diverse people with diverse walks of life and age. However, certain harsh policies and schemes
have also been taken up by the human resource management teams of Starbucks as well, that
have proved to be obnoxious towards the employees and staff. Starbucks has taken up certain
strict and rough decisions in case of monetary incentives and extra monetary benefits given by
them to the staff and employees. They have declared that any kind of cash incentives should no
longer be provided to the employees for getting the managerial posts for the year. It has also
announced that the women workers and employees who have taken maternity leave for a long
time and has subsequently joined the organization again would not get any bonus or monetary
incentives for it as they do not find any extra benefit for the organization from such employees.
Moreover, Starbucks have rejected and detained certain minor benefits that were been given to
the employees. They have stopped rewarding the new mothers with hampers, employee birthday
orders and congratulations cards of the staffs for their work anniversaries. Such moves are
assumed to be diminishing the motivation and morale of the employees, therefore, leading them
to low productivity and dissatisfaction in their jobs and professional roles.
Starbucks in China
China is considered to be the only country with largest population. Therefore, the
industrialization of China is considered to be massive, diverse and ever evolving. Starbucks
Company has introduced certain monetary as well as non monetary benefits for its 30,000

9STARBUCKS: AN ANALYSIS
Chinese employees in its subsidiary in China (Kahn and Zheng 2016). Starbucks recently has
introduced a sabbatical leave policy and also subsidy for housing allowance for the employees in
its branch in China. The Company has included an initiative known as “Career Coffee Break”
scheme that has enabled the Chinese employees who have completed almost ten years of their
service with Starbucks, to take a sabbatical leave for up to twelve months (Hrreview.co.uk 2016).
Even though the sabbatical leave they have offered to their employees are unpaid, yet the
employees are entitled to be getting the regular workplace benefits as well as the allowance to
return to their profession afterwards, if they wish to. The mentioned scheme has already been
offered to the employees of the United States by Starbucks but the company has introduced the
policy in China to recognize and acknowledge the efforts of the diligent employees who can
prove to be long lasting and sustaining. Starbucks Company is also introducing a monthly
subsidy on housing allowance for the “baristas” who work for the company on the basis of full
time and the shift supervisors. The employees are eligible to attain the subsidies after six months
of their service period. The housing allowance which the company is providing the Chinese
employees is assumed to ensure the financial well being of the employees up to a certain extent
(Hrreview.co.uk 2016).
The situation of the working force, labor and the employable youth of China have been
subsequently dealt with by the government of China and many provisions have been built to
safeguard the requirements and integrity of them. Recently, the industrial companies of China,
collaborating with the governmental aid and undertakings, are planning to build vast and
convenient accommodations and dormitories for the employees who have moved from the
countryside to the cities for employment opportunities. The dormitories and the accommodations
would be exclusively built for the non married workers, as said by the President of Washington

10STARBUCKS: AN ANALYSIS
State China Relations Council to the Seattle Times. According to Belinda Wong, the president of
Starbucks China, the human resource management team of Starbucks China is always on the
path of investing up on the employees and the industry leading experts have considerably
invested on the Chinese employees to see whether they can achieve their personal as well as job
oriented, career oriented and professional goals amidst the organizational structure and functions
(Hrreview.co.uk 2016).
China has been facing certain remarkable and unique human resource management issues, even
though the population of China is the largest of all nations and diverse in various
multidisciplinary fields. The most customary issue which the human resource management
departments of mostly all industries of China face is difficulty in finding and optimizing actual
talents (Rowley and Cooke 2014). The foreign companies that function and operate in China
faces numerous troubles such as, the foreign human resource representatives of the respective
organization are not permitted by the Chinese government’s employment laws and regulations to
hire the employees directly. The human resource management representatives of the foreign
companies are told to take the aid of the specially designated human resource agencies exclusive
for the Chinese candidates and the prospective employees. There are also linguistic prohibitions
where the official labor contract is always written and composed in Chinese. There is an
allowance of only two fixed term contracts. The foreign companies who operate their business in
China are under strict standards of surveillance from the labor parties and the government of
China than the other local companies inherently from China. Therefore, it is evident that the
communist government of China, which is highly optimized for the rights and privileges of the
working class society of the nation, possess a plethora of difficulties and complications for the
foreign companies to operate in the nation. However, Starbucks has successfully coped with such

11STARBUCKS: AN ANALYSIS
issues by designating a Chinese woman named Belinda Wong as the Chief Executive Officer of
Starbucks China who has subsequently comprehended, analyzed and interpreted the Chinese
culture, ethnic behavior and code of conduct, synchronized with the socio-cultural, socio-
political and socio-economical dynamics of China and has formulated policies, programs and
schemes according to the requirements and the preferences of the Chinese people and their
market demands. The Chief Executive Officer of Starbucks China has subsequently been
successful in her designation and is considered to be one of the basic reasons for the success of
Starbucks coffee shop chains in a land where the people are traditionally tea-drinkers since
centuries. It is the research, skills and aptitude of Belinda Wong while she studied the Chinese
culture, socio-economic behavior, psycho-social behavior of the millennial and the youth of the
twenty first century China for implementation of her organizational and business goals. Belinda
Wong is the woman who has been credited for providing monetary and other incentives to the
employees of Starbucks such as providing housing subsidy to the Baristas and Supervisors who
work full time in Starbucks (Chinadaily.com 2017). She has been also associated with building
up an initiative Starbucks China University Program where the prospective employees and
candidates are assumed to be given highly optimized and premium training sessions to enhance
their performance in the organizational levels which is assumed to be increasing the productivity
and credibility of the organization. Belinda Wong is also credited for formulating “Partner
Family forums” for the first time in the history of industrial environment in China where the
organization exhibits their values and gratitude towards the parents of the employees. Such
moves and schemes taken up the Wong have resulted in an increase in employee morale and
gratitude towards the organization up to a certain extent (Chinadaily.com 2017).