You are probably use to seeing starbucks coffee shops everywhere that you might not realize that the
company went from 11 stores in 1987 to 2,600 in the year of 2000. This incredibly rapid growth sprang form the company’s ability to create a unique experience for customers who wanted to buy this dietint brand of lattes and mochas where ever they found themselves. At Starbucks’ core, there was a culture of treating each customer as a valued guest who should feel comfortable relaxing and taking in the ambience . Whether you were in the company’s founding location in Seattle, Washington, or at the other end of the country in Miami, Flordia, you knew what to espect when you went to a Starbucks. This uniform culture was truly put to the test in the face of massive expansion, however, and by 2006 Starbucks chairman and former CEO Howard Schultz knew something had gone wrong. He noted that “As I visit hundreds of Starbucks store in the cities around the world, the entrepreneurial merchant in me sensed that something intrinsic to Starbucks’ brand was missing. An aura. A sprit. The stores were lacking a certain soul.” Starbucks’ performance has become lackluster, with hundreds of planned store opening being cnacled and hundreds more store being closed.
So, Schultz too the dramatic step of coming back as CEO and engaging ina company wide effort to change the corporate culture back to what it had been before its expansion. All 7,000 Starbucks store were closed for a single afternoon as part of training effort of 135,000 baristas. Quality control was a primany mission; baristas were instructed to pour every glass of espresso like honey from a spoon, to preserve the flavor. This emphasis on quality over speed ran counter to the principles of mass production, but it was just what the company needed to ensure ot could retain its culture. Espresso machines that obscured the customers’ view were replaced with lower profile machines that allowed baristas to look directly at the guest while making beverages. And ” assembly-line production,” like making several drinks at once, was discouraged in favor of slowly making each drink for each customer.
Schultz is convinced his efforts to take culture back to its roots as a neighborhood coffee shop-one embraced with the :romabce of coffee” and treating every customer as an old friend- has saved the company. Today, Starbucks earns more than $3.6 billion in quarterly revenue and operates more than 18,000 store in 60 countries around the globe.
Prompt: Respond to the following questions based on the case study “Incident One: Starbucks Returns to Its Roots,” in Chapter 18 of Organizational Behavior.
a. Evaluate the paradigm shift from pre-modern (industrial) to this postmodern organizational perspective to identify any current ideas applicable to the Starbuck’s case study in shifting from a task-oriented perceived culture to a people oriented culture. Is this a growing trend in organizations today? Is the external culture (e.g. customers) becoming expectant to these behavioral changes?
b. What assumptions related to postmodern organizational theory applies to the Starbuck’s case study. Are the needs shifting to not allow for the pre-modern organizational model? Is there an assumption both internal and external in the ‘correct’ organizational model, if so, what are the perceptions and behaviors that drive this? What cultural shifts have occurred that are influencing these assumptions and expectations?
c. Postmodern theory involves the human aspect of an organization. Organizational theory has evolved over the last several decades, beginning at an Industrial perspective which was a mass production focus to this postmodern theory where such leadership focus is on Servant Leadership, Collaborative Leadership, and others. This postmodern theory involves a more people-centric dynamic that draws upon the resource of its human capital. So if the postmodern theory is about the human capital within an organization does the case study conflict or agrees with the postmodern theory?
d. What organizational model/structure would you select for the new vision of the Starbuck’s CEO?