Introduction: Company Background
Starbucks, founded in 1971 by Jerry Baldwin, is a leading coffee roasting company that has grown significantly since it was started. The company operates with a business model based on the objective of providing high quality roasted coffee beans and equipment. Through the years, the company’s business model has changed multiple times in a bid to offer all services and products through the lens of humanity, creating a common ground where people can meet and socialize. The company has since expanded to include the provision of high quality premium teas as one of its major product categories. The company has built a culture in which it creates social impact through responsible and sustainable sourcing, creation of opportunities for local communities, leadership in green retail and strengthening communities. Through more than 28,000 stores distributed in more than 75 countries across the world, the company has continued to drive change towards better environmental sustainability, ethical business, and sustainable solutions. This has been enabled through the company’s leadership structure that takes into consideration key business principles including maintenance of strategy and focus; drive for self and others; listening, observation, and leadership; culture of excellence; promotion of diversity and inclusion; anticipation of change and innovation fostering; and being your own boss. Each of these principles addresses a particular aspect of business, which influences decision making and business performance.
7 Principles
The principle of strategy and focus describes the commitment to singular organizational goals and the development of an organizational strategic plan, culture, and behavior that enables growth towards that direction (Hashim, 2016). Business strategy and focus are important for any business to grow. The management of a company intending to grow has to share its business plan, the strategy and the focus for the other staff to be able to align their own directions with those of the company. The most important thing in this is to be able to get employees who not only fit the technical needs of the company, but those who also fit the organizational strategy, and are able to work towards the singular company goal. A good strategy is one that is capable of meeting the needs of the organization’s stakeholders today while also promising to meet the future needs of those stakeholders. For Starbucks, this has been done in several ways. For instance, the company has clearly articulated its goals and objectives, as well as the business model with which it operates. The company has also communicated the intention to create opportunities for employees and suppliers as well as the intention to grow people within an ethically and socially acceptable framework that fosters mutual understanding and engagement.
The second principle with which the company has continued to operate is the drive for self and others. Creating a drive for others in any business context would entail engaging others on the path towards sustainable growth through strategies such as partnerships, community based programs, and programs that pursue the social well-being of organizational stakeholders. According to Hashim (2016) the drive for self and others is developed in an organizational context in which growth is considered communal. Starbucks for instance, has a mutual growth strategy that includes the suppliers, employees and customers. Through considering the needs of different categories of citizens in the population, the company has managed to develop growth platforms that focus on the needs of the organization as well as those of others such as the military, the youths, and the farming communities. Each of the partnerships developed by Starbucks, particularly through the Starbucks Foundation, are essential towards growing others as much as they grow the company (Starbucks, 2019). Moreover, each of the partnerships is focused on realizing the goals of the groups targeted. This implies that any individual or group can only benefit from Starbucks when they already have dreams and/or goals of their own. The company for instance provides an opportunity for youths to be engaged in training activities through which they learn skills that can be beneficial to them in the future. This opportunity is however only available to youths who have shown the willingness to be engaged.
The company also focuses on the principle of listening, observing, and leading. This principle implies that the leadership of the company and the company as a whole should focus on the individual needs of stakeholders to enable them develop strategies for addressing specific target group needs. The listening and observational practices in an organization enable leaders to identify entrepreneurship and growth opportunities both among the organization’s human resources and beyond. For effective leadership to be accomplished there is also need for continuous recognition of the gaps in needs satisfaction, in motivation, and in guidance. In this way, a company can consistently keep its staff motivated by always providing a promise to satisfy a particular need associated with the workforce. For Starbucks, the ability to leverage listening, observation and leadership has been demonstrated severally through the company’s projects, how it treats its employees and the value proposition it provides to customers.
To be continuously innovative in product design, the company has to listen to customer needs and address them. One outcome that can be linked to listening and observation was the introduction of premium teas into the company’s range of products based on cultural differences with regards to beverage utilization. Other outcomes include leadership in environmental sustainability; focus on the supplier chain and employee management. Each of these outcomes can be attributed to specific elements of observation and listening, which help in understanding market dynamics and fine-tuning company operations to market changes.
A culture of excellence is another principle that company focus on maintaining in order to be consistently reputable in whatever industry they operate in. A culture of excellence in any organization is defined as the way in which people think about the organization, from the practices used by all members to “be excellent” to the rules through which people work together (Mintrom & Cheng, 2014). In creating a culture of excellence, the first step is usually to assess the existing organizational culture. The second step would be to define the values that are important for the organization as a whole as well as for the employees of that organization. In doing so, there has to be clear understanding of the implications of the outward gestures of the culture of excellence, namely satisfied customers and repeat purchases. For an effective culture of excellence to be established, not anyone should be allowed to handle the progress. On the contrary, proven leaders should be allowed to take control of the process by starting from the core values of the organization.
Starbucks has used multiple strategies to come up with a sustainable culture of excellence. By working with others, it has been possible for the company to build a name as the leading provider of premium coffee and tea products and equipment, a reputation that has been sustained through sustained product quality (Starbucks, 2019). Accordingly, the company has managed to initiate all its employees and stakeholders into the organizational culture in which all members aim at giving their best. The recognition of the company as one of the best in nurturing human spirit is one of the greatest indicators of its commitment to excellence. Other indicators reported by Starbucks (2019) include a 100% score on the disability equality index; recognition as one of the most ethical companies in the world; and recognition as among the most admired companies in the world.
Some of these recognitions come about due to the company’s recognition of diversity and inclusion. Diversity is recognized as the differences in race/ethnicity, religion, or any other factors that occur naturally. The value of diversity in any organization is such that those who are included into the organization as part of the minority groupings add value through their distinctive knowledge, cultural differences and value principles (Nair & Vohra, 2015). For a global company such as Starbucks, diversity is particularly important due to the need for interaction with customers from diverse backgrounds. Having a culturally aligned workplace is an essential part of adding value to the customers, and Starbucks has particularly captured this aspect perfectly. According to the company website, Starbucks has been awarded for its disability equality, and for being military spouse friendly, aspects which are really crucial in diversity inclusion. The company is an equal opportunity employer that does not exclude any of its members from full participation towards achieving the organizational goals and objectives. Considering this characteristics, it can thus be said that the awards that have been accorded to the company in the recent years are warranted.
Modern day organizations are under constant pressure to be innovative in order to be continuously aligned with customer needs and to be sustainable. This therefore means that companies capable of anticipating change and fostering innovation have a stronger competitive advantage as they always have something new to offer customers. An organization such as Starbucks works in an industry in which there is significant competition, and creativity in product design is key. As such, understanding the changing customer needs and aligning the current operations to those needs is a crucial aspect of the business. Through the years, Starbucks has consistently given customers the value they need through new products, new designs of existing products, and provision of alluring alternatives to common beverages (Starbucks, 2019). The categorization as a premium brand has also played a critical role in communicating the company’s innovativeness to the existing and new customers. Having begun as a coffee house, the company’s divergence into the provision of other products such as lunches and snacks is an indication of the innovation trend in the company and its willingness to move with the times. Also, Starbucks has effectively adopted the use of technology in service delivery through platforms such as the online ordering system and deliveries, each of which is a common feature of modern day businesses.
The last principle that Starbucks has managed to develop and to foster in its branches is that of being your own boss. This principle works mostly as workers get the feeling that they are part of the organization in general and are thus more willing to sacrifice in order to get what they need. The most common approach through which organizations that operate globally such as Starbucks use to promote the principle of being your own boss is that of franchising. However, Starbucks’ model of operations deviates slightly from the franchising model, yet still gives a business owner the opportunity to be part of the organization. This is through arrangements in which Starbucks owns business premises, which are run by their respective owners (Starbucks, 2019). The company thus pays for the premises and the labor provided by the employee. On the other hand, the employee (or store owner) in this case, benefits from free board and business operations under Starbucks, a household name. The store owners are licensed by Starbucks and Starbucks monitors operations in their businesses. In this way, they are able to ensure sustainability and profitability, and also enable the store owners to use the Starbucks brand in their operations.
Conclusion
An understanding of an organization’s needs, the motivation and needs of all its stakeholders and the environmental and social responsibilities associated with its operations helps in determining the principles that would guide those operations. At Starbucks, the company has developed its operations around several key principles, some of which have been highlighted herein. Each of these principles touches on specific operational aspects, which have been customized by the company through an organizational culture that not only recognizes diversity but also recognizes the role of each person in the organization.
References
Hashim, M.K. (2016). Approaches to formulating business strategy: A review. Arabian Journal of Business Management Review, 7: 281. Retrieved from www.omicsonline.org/open-access/approaches-to-formulating-business-strategy-a-review-.php?aid=85973
Mintrom, M., & Cheng, M. (2014). Creating cultures of excellence: Strategies and outcomes. Cogent Education, 1(1). Retrieved from www.tandfonline.com/doi/full/10.1080/2331186X.2014.934084
Nair, N., & Vohra, N. (2015). Diversity and inclusion at the workplace: A review of research and perspectives. Research and Publications. Retrieved from pdfs.semanticscholar.org/e46b/01026f8859fa16a918cfb69590f2e955a052.pdf
Starbucks (2019). Starbucks company recognition. Retrieved from www.starbucks.com/about-us/company-information/starbucks-company-recognition