Case Study on Leadership in Starbucks Corporation: Challenges

This case study analyzes the leadership of Howard Schultz at Starbucks, focusing on challenges faced during the company's expansion into Australia. The organization encountered cultural barriers and differing consumer preferences, leading to financial losses. The case study recommends implementing Lewin's change management model and Fiedler's contingency model to improve leadership effectiveness. Additionally, it suggests adopting democratic, servant, transformational, and innovative leadership philosophies to foster employee engagement and drive organizational growth. Ultimately, the report emphasizes the need for adaptable leadership strategies tailored to specific situations and cultural contexts. Desklib offers a variety of resources, including solved assignments and past papers, to support students in their studies.

Running Head: CASE STUDY: LEADERSHIP IN STARBUCKS
LEADING PEOPLE
CASE STUDY: LEADERSHIP IN STARBUCKS

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CASE STUDY: LEADERSHIP IN STARBUCKS
Table of content
Introduction.................................................................................................................................. 3
Discussion................................................................................................................................... 3
Conclusion................................................................................................................................... 6
Bibliography................................................................................................................................. 7

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CASE STUDY: LEADERSHIP IN STARBUCKS
Introduction
Starbuck is an international company based in Washington. The organization has more than
12000 stores and operates its business in more than 60 countries. In 2015, the organization has
expanded its business in 72 countries (Mason, Cole & Goza 2017). Howard Schultz is the leader
of the organization and his leadership style enables the organization to achieve its goals. This
report includes a case study on the leadership problems faced by Howard Mark Schultz, the
leader of Starbucks. This report also includes some philosophy that Howard should apply for the
development of the organization and leadership style.
Discussion
Case study
This case study includes an analysis of leadership of Howard Schultz in Starbuck Corporation.
Starbucks is an American coffee company. It offers different kinds of hot drinks and cold drinks
to its consumers. The main aim of Starbuck is "to inspire and nurture the human spirit- one
person, one cup, and one neighborhood at a time". In 2019, the organization operates it
business in more than 30000 locations across the world. Howard Schultz is the leader of the
organization and his leadership style enables the organization to achieve its goals. Schultz has
the ability to motivate his employees and also had a clear vision of guiding his workers and staff.
There are many challenges and leadership problems faced by the leader of Starbuck during its
leadership. The organization aims to operate its business in Australia but has faces cultural

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CASE STUDY: LEADERSHIP IN STARBUCKS
barriers and the taste and preferences of Australian are different from Americans. The
organization has to change its serving style (Binci, Cerruti & Braganza 2016).
Issues
The company aims to operate its business in Australia. Australians prefer local coffee shop, they
always prefer Australian service style they did not like the serving style of Starbucks (American
style). So the organization needs to change its serving style into Australian style from American
style. In the first seven years the organization has faces 105 million losses because of the taste
and preference of the Australian consumers and also because of old leadership style. The leader
needs to change its leadership style because the traditional style is not going to help to organize
in achieving the goal. The organization needs to change its model. The leader faces many issues
in making employees understand the need for change in services in Australia, even if the
organization is facing a critical time. The changes in leadership style created confusion among
the workers. The outcome of such changes was very disappointing because it also affects the
skills and quality of the employees. So the organization faces cultural barriers during operating
its business in Australia. The culture of America and Australia is very different. In order to open
store in Australia the company has hired employees from Australia and faces problems in
communication with those employees because of the language barrier and cultural barriers
(Nichols 2016).
Recommendations
In order to handle the situation, the leader of the organization should follow the conceptual
model that includes three steps. The three change model of Lewis should be applied by the
company in order to maintain the growth in the company. The organization can easily make

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changes in the leadership style with the help of Lewis change model. Howard should apply
fielder contingency model in order to maintain the qualities of leadership among the workers.
This model states that the performance and activities of a group are totally depending on the
leadership style of a leader. Howard should use LPC questionnaire in order to identify the
employee’s leadership style. The employee should be asked to think about all the coworkers and
describe them by rating them on a scale of 1 to 8, for example, cold-warm, friendly-unfriendly,
pleasant-unpleasant. If the employee describes the colleagues in a positive way that means the
employee is interested in making personal relations with others, similarly if the employee
describes the colleagues in a negative way or gives a low score then the employee will regard as
work-oriented and mostly interested in getting the work done and in production. After such
assessment and process the leader needs to match the employee according to their situation.
Once the leadership style of an employee identified then Howard, the leader can easily match the
leadership style of an employee with the situation of each employee (Harrison 2018).
Recommendations- Philosophies that Howard needs to apply
The democratic leadership philosophy
Howard needs to apply this leadership philosophy and should guide their members and
employees. This kind of leadership is participative and representative. Its target is to create and
establish a good connection with the employees. This leadership philosophy enables an
individual to participate in the process of decision making (Iqbal, Anwar & Haider 2015).
The servant leadership philosophy
Howard should apply this philosophy which includes asking the employees to participate in the
decision-making process. The leaders who apply this philosophy never take credit for the

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development. This is a good style in order to make the organization environment positive
(Barbuto & Davoudpour 2019).
The transformational leadership philosophy
The leader needs to apply this philosophy in order to encourage the employee to create new ideas
and strategies and then perform accordingly. This philosophy will enable the leader to motivate
their employees by creating new commitments and excitement which will help the leader to
enable the employee towards the growth (Galli 2019).
The innovative leadership philosophy
Thus philosophy needs the leader in order to grip the circumstances in its aggregate. Thus kind
of leader is an innovative thinker that always tried to bring new effective ideas. This philosophy
is best for Starbucks that wants to create new ideas and wants its employees to think creatively
(Ikeda & Marshall 2016).
Conclusion
Starbucks is an American coffee company. It offers different kinds of hot drinks and cold drinks
to its consumers. There are many leadership philosophies that are profitable in different
situations and in different environments. It is concluded from the above report that the leader of
Starbucks needs to apply above philosophies according to the needs of the situation. The Howard
should apply the three change model of Lewis in order to maintain the growth in the company.
There are many issues faced by the organization during its leadership, so the leader of the
organization needs to change its leadership style and should apply leadership according to the
desire of the situation.

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CASE STUDY: LEADERSHIP IN STARBUCKS
Bibliography
Barbuto, JE & Davoudpour, S 2019, 'Servant Leadership Philosophy Across Intergenerational
Cohorts: An Empirical Inquiry.', Academy of Management Proceedings, vol 1, p. 11539.
Binci, D, Cerruti, C & Braganza, A 2016, 'Do vertical and shared leadership need each other in
change management?', Leadership & Organization Development Journal, vol 37, no. 5, pp. 558-
578.
Galli, BJ 2019, 'A shared leadership approach to transformational leadership theory: Analysis of
research methods and philosophies.', Scholarly Ethics and Publishing: Breakthroughs in
Research and Practice , pp. 751-790.
Harrison, C 2018, Leadership research and theory, 1st edn, Palgrave Macmillan, Cham., United
Kingdom.
Ikeda, K & Marshall, A 2016, '"How successful organizations drive innovation." ', Strategy &
Leadership., vol 44, no. 3, pp. 9-19.
Iqbal, NS, Anwar, S & Haider, N 2015, ' Effect of leadership style on employee performance.',
Arabian Journal of Business and Management Review, vol 5, no. 5, pp. 1-6.
Mason, A, Cole, T & Goza, N 2017, ' STARBUCKS: A CASE STUDY OF EFFECTIVE
MANAGEMENT IN THE COFFEE INDUSTRY', Journal of International Management
Studies, vol 17, no. 1, pp. 43-48.
Nichols, AL 2016, 'What do people desire in their leaders? The effect of leadership experience
on desired leadership traits', Leadership & Organization Development JournaL., vol 37, no. 5,
pp. 658-671.

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