Abstract:
In order to survive in current competitive environment businesses need to continuously adapt changes. A leader plays most important role in managing and implementing the change in any organization. Starbucks is one of the largest organization of current times and have seen many changes since its establishment. This assignment clearly analysis the Starbucks’ leadership and strategic change management. Based on leadership and strategic change management leadership analysis, SWOT analysis and four different strategies are used to evaluate the current strength of Starbucks. Furthermore some recommendations are given for the growth, change and innovation of Starbucks.
Table of Contents
1.0 Introduction: 3
2.0 Company analysis: 4
2.1Howard Schultz’s Transformational Leadership 4
2.2 Organizational culture: 5
2.3 SWOT Analysis: 5
2.4 Starbucks McKinsey 7S’ Model: 7
3.0 Recommendation, Proposed Action and Conclusion: 14
3.1 Improve Stock Market Standing 14
3.2 Strategic Leadership Improvement 15
3.3 Implementation of training and development program 15
3.4 Increase international expansion: 15
4.0 Bibliography: 17
Appendix A 20
Appendix B 22
1.0 Introduction:
Change can be planned or sudden but It is a natural phycology that people do not favor change and they always resist it. Organization always have to manage internal and external factors during any change process. Research suggested that internal factors are related to the style of leadership and management within an organization which significantly impacts the change process (Chirimbu, 2011). People and organizational employees are two intrinsic challenges of any company change and now days these two parties are being considered as the major hurdles in order to implement the change (Smith, 2005). In order to bring any changes in organization leaders are key players. They are also called the “Champions of Change” because the upper level management make it possible to successfully keep continue the change process and sustain the business reliability regarding its operations (Nadler & Nadler, 1998).Furthermore, leaders’ role in developing & changing the business is inevitable while the change failure possibility is always there in any organization (Beer and Nohria, 2000). Structure of any organization creates huge impact on the process of change. In case of complex and larger structure, there are many levels in organizational hierarchy and different autonomous units & multiple decision making methods are available. So different types of personnel are required for this kind of business setting and project teams are also built for achieving certain goals. Management teams and change agents must clearly communicate the reasons and goals for the changes. It is essential to support the development of a complete assessment for any state of affairs (e.g. Kotter, 1990). Researchers also suggest the significance of unveiling the inherent assumptions regarding the methods and nature of change management (Palmer and Dunford, 2008)
Starbucks is one of the largest and best seller company of coffee which is second largest commodity on earth. Currently starbucks have more 21000 outlets in more than sixty countries around the globe. In the first quarter of 2015, it experienced thirteen percent growth in its net sales and the net sales reached the level of dollar 4.8 billion. While the share price has shown the growth by 6.4% and earnings per share was at eighty cents (Starbucks Newsroom, 2015). Starbucks was established in 1971 in Seattle where 3 friends Gordon Bowker, Zev Siegl & Jerry Baldwin were started a small store for selling roasting accessories, brewing, and gourmet coffee beans. Zev Siegl left the company in 1980 and sold his share. But at that time as well the company was top roaster in Washington by owning 6 retail stores. Howard Schultz (Starbucks chairman, president and chief executive officer) had first walk into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined a year later. Starbucks is focusing on speedy international expansion since last 20 years and developing outlets in new countrties quite fast On February 1, 2013, Starbucks opened its first store in Ho Chi Minh City, Vietnam, and this was followed by an announcement in late August 2013 that the retailer will be opening its inaugural store in Colombia. The Colombian announcement was delivered at a press conference in Bogota, where the company's CEO explained, "Starbucks has always admired and respected Colombia's distinguished coffee tradition." Starbucks has announced its first café in Bolivia will open in 2014 in Santa Cruz de la Sierra, and the first in Panama in 2015.
2.0 Company analysis:
2.1Howard Schultz’s Transformational Leadership
A change cannot be successful without strong leader and good leader always take care of individual who play important role during any change process. Transformational style of leadership always pay attention to growth of employees and improved their skills (Bass and Riggio, 2006).Schultz’s transformational leadership style is major reason behind the success of Starbucks which always focus on the motivational needs of employee. Schultz believes the only competitive advantage Starbucks has as a national retail company is its workforce. He fulfils the basic need by providing the handsome salary package. Furthermore, Starbucks fulfils the security needs of its human resource by providing perks with salary and other benefits like insurance, medical facilities, share purchase schemes, and training/development. According to StarbucksGossip.com (2013) andGlassDoor.com (2013), the average salary for a barista is $34,500 a year. Schultz fulfills his partner’s self-esteem needs by providing training, education, and recognition programs. Coffee education and Learning to lead are just a few of the many training and education programs Starbucks offers to its employees to help them build confidence in themselves and the work they do (“Starbucks Coffee Company”, 2013). Starbucks offers over eighteen employee recognition programs providing feedback to its partners promoting motivating behaviours increasing the degree of attachment, happiness, and their willingness to stay with the organization. Schultz leadership satisfies partner self-actualization needs, listening and constantly seeking information and feedback from his partners to articulate his vision. Often Schultz sends emails and makes personalized phone calls to store locations asking for advice and feedback on products, procedures and processes (Brookmire, 2012). When employee’s inner core values are recognized and adapted to Starbucks operations partner self-actualization needs are achieved. Transformational leader not only inspiration for their employees but also delegate authorities to employees in order to achieve goal of organizational change (Mari Svendsen,2016).The leadership at Starbucks shows great ability to make it one of the largest firm all over the world.
2.2 Organizational culture:
Organizational culture contains certain beliefs and values practice by its employees within a company. The culture is very important element for any business because it significantly impacts the performance of the employees. Starbucks’ has developed such culture where employees are treated well in the organization which clearly demonstrate that Starbucks has a strong organizational culture. It arranges different job fairs at different locations around the globe. Because of the uniqueness of its business culture, it is enjoying significant success in the coffee industry. To examine the Starbucks’ internal business culture, Great Holsfedes moel can be used in order to analyses Starbucks which utilized 5 different angles i.e. long power or
ientation, masculinity, individualism, power distance & individualism (Holsfedes, 1991). After applying this framework to understand the culture of Starbucks, it is inferred that Starbucks has the characteristic of long power distance which suggests that all employees in Starbucks are equally treated and no extra favor is given to any one by violating the rights of others. Starbucks views employees are as members of one big family and so, as in the family of Starbucks, employees are always encouraged to participate, innovate, and create in an environment where their wellbeing is taken care of at all levels. Starbucks has more female employees as compare to the males but all are examined at the same standards which show that gender preference is not appreciated by Starbucks.
2.3 SWOT Analysis:
Starbucks is one of the well-established organization but world is changing dramatically and in order to keep itself into the market Starbucks need to understand their internal capabilities and weakness as well as external factors which can impact on the organization. SWOT is a tool which helps to strategically analyze the strengths, weaknesses, opportunities & threats related to an organization (Kotler and Keller, 2006). Furthermore, its purpose is to compare the strengths of a company to its weaknesses and opportunities to its threats so as to establish different appropriate business strategies (Bohm, 2009). Following is the SWOT analysis for Starbucks;