Comprehensive Report: Management Operations at Starbucks

This report provides a comprehensive analysis of management operations, focusing on the application of leadership and management principles within Starbucks. The introduction establishes the importance of operational strategy and the roles of leaders and managers in achieving organizational goals. It explores the characteristics of leaders and managers, differentiating their roles in various situational contexts such as product development, quality maintenance, and increasing sales. The report delves into different leadership theories, including situational, system, contingency, trait, autocratic, democratic, functional, and relational approaches, and discusses their implications. It examines the impact of the business environment on decision-making and emphasizes the significance of effective operational management. By analyzing these elements, the report aims to illustrate how strategic management and leadership contribute to Starbucks' overall success and provides insights into how organizations can adapt their operational strategies to achieve their objectives.

Management Operations

TABLE OF CONTENTS
INTRODUCTION:..........................................................................................................................1
P 1 Roles and characteristics of leader and manager..................................................................1
P 2 Roles of leader in different situational contexts ..................................................................3
P 3 Different theories of leadership............................................................................................4
P 4 Approaches to operational management...............................................................................6
P 5 Importance of operational management................................................................................7
P 6 The impact of business environment in decision-making.....................................................8
CONCLUSION:.............................................................................................................................11
REFERENCES:.............................................................................................................................12

INTRODUCTION:
Every business organisation is concerned about their future. It means that how they will
survive and prosper in the future. The set of plan that helps in giving long term direction to the
business is called a business plan. It ensures the growth and success of the organisation. The
operations functions of an organisation is concerned with day to day operations of the business.
This gives the ability to business for long term success. The relationship between operational
strategy and manager is a key determinate for achieving the profits and maintaining quality.. The
key issues that are been faced by the organisation are quality improvement, availability of raw
material and product development. By making and implementing the effective operation strategy
managers and leaders can help in achieving the vision and mission of the company. In this report
the various characteristics and traits of leaders and mangers are shown. Also, how they apply
those in various situations in decision-making. What are the different theories and models of
leadership styles that is been followed. In addition to this the various approaches of operational
management and its importance is shown. In next paragraph it shows the internal and external
factors that affect the manager in taking decision regarding the operational activities
. For undertaking this report the organisation selected is Starbucks. The cited firm
belongs to food sector and operates globally. Thus, this report will help in understanding the role
of manager and leader in operational decision making for the cited establishment.
P 1 Roles and characteristics of leader and manager
Roles of leader:
 Requirement- the leader helps in cooperation by formulating plans at top level. At the
middle level, it is required for implementing the plans and at lower level, it is required for
motivating the employees. Therefore, the requirement of leader helps the overall
organisation.
 Integrates personal and organisation goals- a leader combines the personal and
organisation goals. The leader combines the individual efforts of people achieve
organisation goals through which the personal goals can be achieved. In this way, the
leader helps in integrating the both the goals.

 Solicits supports- the leader is always ready for the support of his coordinates. This
depends upon the personality and experience of the leader. The suggestions of employees
are being invited so that it can be implemented in the plans of enterprise.(.Akalin, and
et.al., 2016.).
 Philosopher and guide -by utilizing his intelligence, a leader guides the employees as
and when required. This is done by supervising and communicating the plan and policies
of top management to employees. The leader always listen and try to solve the problem
by sharing the feelings and opinions of workers.
 Performance management- the manager set goals and objectives of the individual
employees and evaluate those with the performance of the employees. This helps in
providing the task and role to different workers on the basis of their skills.
 Team development- the manger is responsible for developing high performance team.
This is done in order to work together so that the goals can be achieved effectively and
efficiently.
 Setting overall objectives- the manager sets the long and short-term objectives of the
employees in accordance with the organisation goals.
 Manage resources- along with the setting of objectives, the manager provides the
resources that are required to achieve those. It is done to make sure that there is no
wastage of resources.
 Self-development- they do not only develop the employees but also develop themselves
in order to fulfil their needs. The manager is more focused on their development rather
than employees. (Zurich,, 2017
The roles and responsibilities of leader and manager differ according to their tasks and targets.
The leader is responsible for creating a vision or path on how to achieve the goals whereas the
manager creates measures and distribute the goals to individual. In addition to this, leader
innovates new ideas or ways to achieve those goals and often take risk by thinking outside the
box but managers always try to copy the styles from others. Leaders thinking is based on long-
term vision of both the employees and organisation on the other hand, managers thinking is
based on attaining short-term goals through which long term goals can be achieved. Further, the

leaders focus on developing their employees by continuously applying different tactics and ideas
while the managers focus on his self-development and they adopt those skills which made them
successful. And the last one is leaders focus on people by building relationship between
employees and various stakeholders. They do this in order to gain the trust and loyalty of them.
The managers build the process and structure which define working of employees; they make
sure that the process works properly so that the targets can be accomplished. Leaders know what
their people are capable to do while managers assign tasks and provide guidance on how to
accomplish them. Schönsleben,, 2016)
P 2 Roles of leader in different situational contexts
The leader and manager plays an important role in making and implementing strategies to
control any situation in the organisation. They both are the essential part in tackling such kind of
situations whether it is related to increase the sales or improving the quality of product.
Product development- it is a situation in which the company decides to develop a product or
make changes in the existing products. This situation comes when enough profits are not been
generated through existing products or there is change in the needs and wants of customers. In
this the manager makes plans and strategies regarding the change in production process and
assigns different task and roles to each employee. The leader on the other hand maintains
relationship with the customers and try to retain them. They also communicate with the
stakeholder about the changes that are been made. They manager makes policies and procedures
for the new products while the leader helps the employees in adopting those changes.
Quality maintenance- this is the most difficult task to do but also important for the long run of
company. In this the company focuses on the product quality which helps them to increase sales
and rise in profits .in this the mangers and leader both have to play an important role. The
manager evaluates the performance of employees on various basis to check whether they have
performed well or not. On the other hand the leader motivates the employees and find innovative
ways to do the things. The difference here is that the manager is focused on self development
whereas the leader develops the employees (Krajewski, and et.al, 2013) This helps in developing

the employees so that their productivity can be increased which will help in attaining their goals.
And in this way the quality of product can be maintained.
Increasing sales- it main objective of Starbucks is to increase its sales. This is done to attract
more customers and increasing the profits. For doing this the manager plans new strategies and
provides new roles to the employees. The leader motivates the employees and suggest them new
ways to increase the sales .the manager only makes the policies and execute them but the leader
makes team and then give instructions to each team member according to their skills and
abilities.
.
P 3 Different theories of leadership
The traits and characteristics of leader are based upon his personality, attitude,
intelligence and various other skills that he possesses. By applying these skills in organisation
the way of leadership style that has been followed can be observed. It is done in order to ensure
that the leadership style in affecting the organisation in positive or negative way. The various
leadership style followed are:
Situational, leadership- it is a style in which the leader has to adopt the style which helps in the
development of employees. The leader continuously changes his style according to the situation
of the organisation. This is done in order to meet the demands of others by not following the
style of leadership followed. The leader does not want their follower to do so. The situation is
based upon the changing needs of the organisation in order to meet the needs. The overall
decision-making is dependent on leader to guide their followers.
System leadership- in this style, the leadership is based upon both the organisational and
management development. In this, the leader has to work with the system in order to achieve
towards a common goal. It helps in creating high performance in Starbucks with the help of
employees. The leader through his power of influence on employees guides them towards the
organisation. This helps in formally communicating with the employees thereby giving a clear
aim. The employees are and puts his power to employees (Schönsleben, ., 2016

Contingency leadership- it shows that the leadership style is not based only on one style but
also on the situation. This shows that according to the different situations, the leaders can use
different approaches. It is completely based on the human traits that is related to situation in
which the style has been followed. There are two ways of this style. The first one is task oriented
which focuses more on the accomplishment of task and the second one is relationship oriented
which refers to interpersonal relationships. This is done by creating positive relations with the
leaders and co-workers so that the trust and respect are established between them.
Trait approach- this is the first major approach of leadership in which the quality, skills and
abilities of the leaders are checked and according to it the effective and non-effective leaders are
identified. It focuses on physical, mental and social characteristics that are common among
leaders.(.Heizer,, 2016)
Autocratic- in this style, the leader is allowed to make decision without the interference of any
other person. The leader takes the decision and imposes on their followers. The leader is having
the authority to take and impose the decision. The leaders think that the decision made by them is
the best and everyone has to follow that. This style of leadership is only suitable in certain
situations like emergency. These leader’s knowns how to handle such type of situations. So, it
not like that they have to demotivate others who are capable of doing the given task by taking the
decisions. Sometimes, the decision taken by them may hamper the working of employees.
Democratic- the leaders consult and involve others in the decision-making process. The
employees only take part in this process but the final decision is made by the leader only. This is
done to increase respect and trust between others. The opinions and suggestions of employees
are taken into consideration for accomplishing common goals. The employees are empowered to
take actions for their task within the defined boundaries. This style is also known as participative
style which encourages and develop the employees in decision-making process and they feel that
they are also a part of Starbucks.
Functional approach- it means that the leader is not defined by his characteristics or traits but
by the functions that he performs. The first function of the leader is creating objectives that
provides a clear vision of Starbucks. The second function is to define the responsibilities of other
members which helps in accomplishing Starbucks’ goals. (Mérand, and Rayroux,., 2016..)

Relational approach - this approach focuses on the type of relationship that is been prevailing
between the leader and its followers. It also helps in maintaining relationship with the
stakeholders in order to gain trust and loyalty from them. This enables the stakeholders in
assuring that the task done by the leaders is going to help in accomplishment of Starbucks’ vision
and mission.
Transformational approach- in this, high level of communication is built between the leaders
and his followers. It is done to increase the morale and motivation of followers. It leads to
enhance productivity and efficiency which helps in meeting the goals effectively. This type of
relationship is often seen in big corporates where there are many levels and functions of
department.(.Akalin, and et.al., 2016)
P 4 Approaches to operational management
There are many roles and responsibilities of operational management. The main role is to ensure
that the functions of business operates successfully. It involves managing the production process
in which the raw materials are converted into finished goods. There are various approaches of
operational management.
System approach- in this the operations are managed and controlled according to the various
systems involved
Business process re engineering (BPR)- It is an approach in which the core product is
redesigned and the variances in production process is removed.. It aims at cutting the cost of
product and improving the productivity. It is approach in which the innovations are quickly
adopted in management so that an extra value can be added to the customers. There are two main
reason to use BPR first one is to reduce cost and second is to improve quality.
Just in time production- it is a process in which there is a constant improvement in the
production process in order to reduce cost and wastage of materials. This helps in improving the
product quality and maximising the output. The operations decision taken by the leaders which
helps them in just in time.

Six sigma- in this the improvements in products are made in order to reduce cost and improve
quality which focuses on customer satisfaction. It was implied by Mototola.
Employee involvement- this is an approach in which the employees are involved in the
decision making process. It helps in listening to their views and opinions so that innovations in
the production process can be made. The employees come up with fresh ideas on how to make
the existing operations more effective. Moreover, the problems are also discussed and solved by
the manager by involving employees in decision-making.
Total quality management- Through customer satisfaction the long term success of Starbucks
can be assured. This can be done by improving the quality of product, services, culture and
employees . It helps in giving the improved productivity through which the profits can be earned.
The manager takes decision regarding the quality like providing proper resources to employees
and giving instructions to them (Slack, and et.al., 2013.)
P 5 Importance of operational management
Planning, organising and controlling the organisation activities is the functions of operational
management. Through this they are able to manage and control the daily operations of the
Starbucks. They utilise the resources effectively with the help of manpower and produce goods
and products.
Product planning- it is all concerned about the various strategies that are made in order to
design new product changes in existing product, etc. it helps in making the product better which
can satisfy the customers demand. Due to customers changing demand over time it is necessary
to add some more features so that they can be meet the needs. Their core product coffee is
product is very well planned and also the various food items that are been offered.
Quality control- the process in which the measures or actions are taken to improve the quality of
product. It is done by operations that are effective in changing the needs of the product. The
purpose is to make the production process more effective so that no units can be damaged. There
can be many errors in that can b made while producing the product like human errors, poor

materials used, etc. the focus is on removing the faults or errors in equipments that is been used
in production. The leaders are working the most motivated employees working under them
which helps in maintaining quality. Starbucks is no. 1 coffee brand in the world which shows
that the quality is very well maintained by them.( Heizer, , 2016)
Supply chain- it is very important that the product is delivered to the customers at the right time.
This is only possible when the production process runs smoothly. The main element in this is the
logistics department which ensures the timely delivery of raw materials in the Starbucks. The
function of logistics is to purchasing and procurement of raw materials, receiving order receipt,
tracking the order, controlling of stock, warehousing, etc. Starbucks is having the largest coffee
warehouse from which the coffee beans are distributed all over the world. This shows the
working that supplies coffee beans in cheaper cost and lesser time.
Quality management- quality is very crucial part of operation management as it ensures that
the product is made according to customers expectations. The quality management is involved
in checking the durability, reliability, performance, after sales service, on time delivery, etc. of
the product. These all are the factors which is essential in identification of the proper quality of
product. The decision of setting quality labs and centres by the managers helps in checking and
maintaining the quality of their product (Slack, and et.al., 2013)
Operational strategies- the overall strategies of operations are designed in order to implement
what are the different activities that will be performed by the higher level lower level. There
strategies are operational and tactical ones. The leaders and managers decides the strategies and
P 6 The impact of business environment in decision-making.
Return on investment- the return on investment is the most effective element that must be
involved in taking any decision regarding the product development. It affects the entire
profitability. Before going for product development the return on investment must be calculated
in order to identify the profit per unit.

Brand impact- the decisions taken may impact the brand image if not implemented correctly. it
shows that the decision can have a positive or negative impact on the brand of Starbucks. So it is
important to take decision which have a positive impact on the goodwill of Starbucks.
Effect on resources- before taking any decision it is important to look after the resources that
business is having. This means that resources must be properly utilised and what impact it will
be having on the operations of the business.
Opportunity cost- the decision-making is dependent on the opportunity cost of other decisions.
Various alternate decision are identified and the cost of each of them is obtained in order to find
out the best decision that can be taken. It helps in determining the impact on resources if a plan is
not pursued.(Schönsleben, , 2016)
There are many factors which affect the decision-making of leaders and managers in Starbucks.
The factors can be internal or external depending upon the decision which has to be taken. These
factors are described as below:
Threat of substitutes- this means that the competitors products can be used in place of
Starbucks product. The customer rely on the Starbucks for providing the coffee so that they are
able to satisfy its demand. In case of any variation in quality of coffee the other company can
grab that opportunity to enter in the market by producing its substitute. So manager and leader
has to take decision regarding the threat of substitute (Heizer, , 2016)
Buyers power- this force stats that the customers has the power to affect the price of product. It
is affected when Starbucks is having many buyers and they can easily switch to other company.
As Starbucks is having large client base so it is not possible to change the price of the coffee
because the power they hold with them is not enough to change that.
Suppliers power- the price of the product is also affected by the suppliers. They hold the power
to change the price of product whenever they want. Starbucks supplies coffee through own stores
so this factor will not affect the price. The change in price is imposed throughout every store of
Starbucks.
New entrance- the power and customers of Starbucks are also affected by the entry of new
companies in the market. This can give a strong competition in the market and it may weakened

the position of the company. The new entry of scooter's coffee,Dunn Brothers Coffee, etc has
affected the market share of Starbucks.
Competition- the number of competitors prevailing in the industry will affect the price of coffee.
It means that price is dependent upon the number of competitors in the market. When the rivalry
is low the chances of influencing the prices increases. Starbucks is having greater power to
change the price as it having a very little competition (Schönsleben, 2016.)
SWOT analysis: it is the major element which helps the leaders and managers to take decision
in operations management so that the overall performance and product quality can be improved.
Strengths- The major strength of Starbucks is strong financial position which help the leaders to
make policies and procedures. It is also having the largest coffee house in the world which
makes the company to attract consumers. The coffee provided by Starbucks is affordable to
middle class people also.
Weakness- the raw material that is used by Starbucks is coffee beans which is very affecting in
changing the price of coffee. This means that price is very sensitive and is entirely dependent on
price of coffee beans. It has to diversify its product range apart from coffee in order to compete
with other brands.

Opportunities- Starbucks can expand its product range to attract more customers. It can focus
on markets like India and China where vast opportunities for growth are there. Apart from this it
can also collaborate with McDonald and Burger King so that it will help in increasing the
customer base (Akalin, and et.al., 2016)
Threats- the major threat is rise in price of coffee beans which is affecting the overall cost of
product. Also, it is facing competition from local coffee houses.
PESTEL analysis- the overall decision-making is dependent upon the external factors which
affects the entire organisation.
Political factors- the various taxes policy and laws of different countries affects the working of
Starbucks. Also the sourcing of raw materials is an important factor.
Economical factors- the increasing labour and operational cost and the various economic
changes in factors like currency exchanges taxes of different countries, etc has affected the
decisions taking.
social factors- the changes that are occurring in the people like lifestyle of people, working
patterns, changing values of people and consumer preference has affected the sales.
Technological factors- the introduction of Wi-Fi in the stores has attracted a lot of customers.
Also, there is need in developments in agricultural practices that is been used for producing the
coffee beans. It can help in reducing the cost of it.
Environmental factors- The countries which is producing the coffee beans must be having a
strong impact on its agricultural land. The increasing level of global warming is also a big issue
for concern (Slack, and et.al., 2013)
Legal factors- the laws and regulations must be violated of the countries from which they buy
raw materials. The production of caffeine must be done by ensuring the health ans safety of
people.
CONCLUSION:
In the given assignment the roles and characteristics of leaders and managers in
comparison with the operational strategies is discussed. It shows the role of leader and function
of manager that has been applied in different situations. Further it shows that how Starbucks uses

the various leadership styles and models to improve the performance of their employees. A brief
detail of various operational approaches and its importance in operations strategies to achieve
Starbucks goals and objectives is been discussed. At last the analysis of SWOT, PESTEL is done
in order to find the impact on decision-making in operational strategies of Starbucks.