Starbucks Leadership Structure: Unique Strategy

Strong leadership strategy and efficient leadership culture are an integral part of any entrepreneurship. Predetermining the course of the company’s actions, the strategies that are going to be chosen in the relationships with the customers, and the specifics of the organizational behavior within the firm, these elements serve as the building blocks for the company’s organizational environment. Considering the example of Starbucks, its recent downfall and nonetheless impressive success that followed the misfortune as a result of adopting a unique leadership strategy will help prove the significance of a leadership strategy.

An Introspective into the Mechanism of Starbucks’ Clockwork: Leadership Culture, Team Structure and Human Resource Strategy Analysis Adopting the right leadership approach is not easy. Choosing a leadership culture, one sets the standards for the organizational behavior and predetermines the rates of the employees’ engagement, which influences the quality of the product considerably. One of the most outstanding examples of a leadership culture is the one adopted by the head of the Starbucks.

Because of the choice of a mixture of servant leadership and persuasive leadership cultures, Schultz has managed not only to survive the recent notorious expansion crisis (Seaford, Culp, & Brooks, 2012), but also to reorganize the company a mere year later towards even more recognition and success. Starbucks and Its Leadership Culture Speaking of the leadership culture at Starbucks, one must mention that the company has deviated from the traditional concept of a perfect leadership style.

It is a common knowledge that the transformational leadership is the optimum choice for any major company to arrange the work of its employees in the most efficient way possible.

Get quality help now

RhizMan

Verified

Proficient in: Organizational Structure

4.9 (247)

“ Rhizman is absolutely amazing at what he does . I highly recommend him if you need an assignment done ”

+84 relevant experts are online

Hire writer

According to the existing sources, transformational leadership offers for much more opportunities in improving the production process through the change of organizational behavior of the employees and the change of corporate culture, since it allows for a transformation of the way in which the employees see their work and its significance.

Helping the company leader both pay enough attention to the staff and control the production process, the given approach is considered the most efficient one at present. However, Starbucks went even further in their dedication to the needs of their staff, claiming that the company adopts a servant leadership strategy. The above-mentioned choice can be justified by the fact that Starbucks has always insisted on the significance of establishing perfect relationships between the company leader and the staff.

According to the principles, which Starbucks is guided by, the company’s highest priority is the concern for the personal and professional growth of its employees. As it is stated in Behar and Goldstein’s article that studies the specifics of leadership structure in Starbucks, “At Starbucks, we value people most of all, more than we value money. From the very beginning, people have always come first. People come before profits. People come before worrying about lawsuits. People come before the coffee” (Behar & Goldstein, 2010, 20).

It must be admitted that the given leadership culture has its pros and cons. One of the doubtless benefits of the given strategy is that Starbucks will always have devoted staff, which works to provide only top quality products. After all, it is important to develop trustworthy relationships between the members of the staff and the managers. Thus, numerous conflicts can be avoided, and the process of knowledge management can be improved considerably.

With the help of servant leadership approach, one can make sure that the contribution of each member of the staff is appreciated and that the needs and wants of every single employee are taken into consideration. Thus, better cooperation between the employees and the management can be provided. Unfortunately, the given leadership culture also has its problems, which the Starbucks has already experienced, according to the results of the recent research. One of the most obvious drawbacks regarding the servant leadership style is that it takes impressively long time for the given leadership style to have effect.

While the given peculiarity of a servant leadership style may not be the issue with the employees who have been working in the company for quite long, with the newcomers, it will take much time for the servant leadership style to influence the perspective of the former. Team Structure of Starbucks Starbucks also has a very peculiar team structure. Before proceeding with the analysis of the Starbucks team, it should be mentioned that there are different ways of classifying the team structure, depending on the basic principle of classification.

For example, depending on the role that a company leader performs in the specified company, teams can be described as ego-less, democratic hierarchical, chief programmer, and ideal teams. Choosing the focus of the teamwork, one will be able to split the teams in existing companies into divisional structure, matrix structure, organizational circle, etc. Starbucks, however, offers a very special case of team definition. Since Starbucks puts a major emphasis on the relationships with its staff, it can be assumed that Starbucks employs a matrix team structure.

Indeed, when considering the specifics of the way in which the teamwork in Starbucks is organized, one must mention that the company’s strategy is to combine the functional division and the product-based one, with the necessity to report to two people at the helm. As a result, the company displays a very well developed hierarchy, with every employee being assigned with a specific function and a very strict control taken over the entire production and knowledge management processes. The principle of hierarchy employed at the Starbucks Company can be viewed as both a very reliable and at the same time a rather old-fashioned approach.

Speaking of the negative aspects of the hierarchy structure employed in the Starbucks Company, one must mention that it allows very little wiggle room for the staff to make decisions concerning a specific task. On the one hand, it may be assumed that total control is a part of the company’s plan. By adopting the hierarchy team structure, Starbucks leader can delegate powers to specific people, control the company processes and be aware of the slightest changes within the enterprise, which is especially important for a company of the scale and size of Starbucks.

However, it is also worth bringing up the aforementioned principle of an organizational strategy implies that the leader does not trust the employees enough to offer them enough power and, therefore, preferring to take full control over the entire production process, which can be viewed as a contradiction to the previously mentioned employee-targeted leadership style. Hence the key problem regarding the Starbucks strategy concerning the organizational structure and the policy towards the staff emerges.

While the company clearly aims at breaking new grounds in the relationships among the staff and the company leader, it still does not consider its employees reliable enough to undertake the decisions that influence the company tangibly. At present, the given issue seems a major problem regarding the company’s organizational strategy. HRM Strategies at Starbucks In his attempt at making the Starbucks a landmark in the history of companies’ development, the leader of the enterprise also adopts a very curious human resource strategy.

There is no need to stress the significance of the ability to choose the right people and assign them with the right tasks. Therefore, it is crucial that the right strategy for choosing employees from the available candidates and assigning these employees with the corresponding tasks should be adopted. As a rule, the in the given process, mistakes are unavoidable, since it is hard to decide from the very star whether the specified person is going to perform well in the chosen setting. The Starbucks Company, however, found a very efficient means to solve the above-mentioned problem.

To start with, it is necessary to stress that, as the most recent data shows, Starbucks uses a combination of HRM strategies to obtain the maximum effect. The situational approach seems the most reasonable in Starbucks’s case, since the market in which the company operates has witnessed an impressive change lately, i. e. , the use of the so-called capsule coffee. Only attempting to produce capsule coffee at present, Starbucks is, therefore, in the environment of stiff competition, which means that the company should be especially careful about the choice of employees and the means to upgrade the skills of its current staff.

As it has been stressed above, employees are the Starbucks Company’s key priority along with its customers. Consequently, the HRM strategy used by the company can be described as the approach that allows for creating the environment for its employees’ personal and professional growth, where each of the company’s staff is treated with due respect and dignity. It is also essential to stress that Starbucks encouraged diversity in the workplace.

Thus, it can be assumed that the company does everything possible to prevent the instances of discrimination on any basis in the workplace, be it the discrimination based on race, gender or religious beliefs. As a result, the Starbucks Company is considered one of the most progressive companies of the XXI century for a very legitimate reason. To describe the approach that the company adopts in its HRM practice, the following elements must be mentioned: benefits, recruitment, training, and performance appraisal. It is hard to overrate the importance of each of the components.

To depict the company’s approach towards employees’ recruitment and training, one must bring up the company’s guidelines known as the Six Principles: * Making sure that each of the employees has been provided with the decent work environment and is treated with dignity and respect; * Providing diversity in the workplace as the basis for equal opportunities for people in business; * Applying the highest standards concerning the production values and process, as well as other related services; * Meeting the customers’ demands and making certain that every single customer is satisfied with the service quality and thrilling them into becoming Starbucks’ clientele; * Creating the environment that works for establishing a strong and integrated community of employees; * Recognition of profitability as one of the elements that is essential for the company’s further success in the specified market.

The above-mentioned list clearly focuses on the development of trustworthy relationships between the company leader and the employees. Even with a specific emphasis put on the company’s performance in the last postulate, it is clear that Starbucks’ key priority is to build strong and reliable link between its employees and managers, as well as support the professional growth of the staff. Thus, it can be assumed that Starbucks invests in each employee, training the latter and encouraging his/her progress, while the employee offers the company his/her services, which improve gradually.

The given approach cannot be denied its effect on the company’s performance – the more an employee is trained, the better (s) he performs. The given strategy, however, also has a number of disadvantages, one of which concerns the time, effort and money that the company is likely to waste in case of an HRM mistake. Unless the human factor is completely eliminated from the company’s HRM department, mistakes in assigning the wrong people with the wrong positions will continue, which is quite natural. For Starbucks, with its devotion towards each employee, however, several HRM mistakes in a row might turn out fatal, since the resources spent on training, coaching and encouraging. Starbucks: Motivation and Effectiveness

Regardless of the aforementioned drawbacks in the shield of the company’s HRM practices, it must be admitted that the general course of Starbucks concerning the leadership strategy, the team structure and the chosen HRM approach are rather efficient and refreshing in the light of the fact that most companies adopt a transformational leadership style at present. In contrast to the latter, Starbucks clearly states that it does not aim at reinventing the employees’ perspective of teamwork, which means that the employees are not going to be put into a stressful environment. Therefore, the chosen track works perfectly well as the means to create engaging environment for the employees.

The corporate values clearly involve professional development of the employees, and the HRM strategies are evidently aimed at investing into the current employees as much as possible, making sure that the current staff, who is presumably already expert in their jobs, will evolve professionally so that the company could use the services of experts. The fact that Starbucks actually invests into its employees and allows for their professional growth instead of using their potential thoughtlessly, as most present-day companies do, is alone outstanding. Thus, it can be assumed that Starbucks’ approach towards its human resources is the company’s greatest asset. It is quite impressive that the company actually manages to translate the demands of the employees into the principles of the corporate HR strategy.

The key advantage of the approach chosen by the company is that it motivates the employees not merely for a change, but for a conscious progress and encourages them to develop professionally, at the same time keeping them willing to contribute their newly acquired skills and knowledge to the company for the benefit of the latter. As Baker et al. (2008) explain, conscious motivation is the first step towards success: “A typical recipe for motivation calls for a mixture of persuasion, encouragement, and compulsion. Yet the best leaders, we suspect, need no recipe: They get people to produce great results by appealing to their deepest drives, needs, and desires” (Baker et al. , 2008, 51). Concerning the Negative Effects of the Leadership Strategy

However, Starbucks also displays a number of negative tendencies that might possibly hinder the company’s progress. As it has been mentioned above, the fact that the company invests so much into the employees’ development makes it extremely vulnerable towards the employees who do not see themselves as members of a team and prefer shifting from one company to another in search for better terms of employment. In a nutshell, the company’s key problem is that it does not reinvent the employees’ perception of teamwork; instead, it adapts towards the employees’ requirements to a reasonable extent. Nevertheless, chances are that even such type of employees will learn the benefits of working for the Starbucks Company and change their motivations.

Another considerable drawback of the leadership strategy chosen by the Starbucks Company is that when pushed too far, nit starts conflicting with the company’s interests, i. e. , efficient production and selling. According to the recent news, Starbucks has already faced a crisis when trying to conquer new markets and abandoning its initial strategy of putting the employees before the company. As the reports say, after the experiment mentioned above failed, the Starbucks Company resumed striving for its employees’ professional growth. Therefore, it must be admitted that the leadership strategy chosen by Starbucks presupposes that the company must take care of the expansion and the personal and professional needs of the employees, which is a rather complicated task.

That being said, the key drawback of the chosen leadership approach is that it does not allow for radical changes, which the company is likely to benefit from, since these changes might affect the employees negatively, which the company’s policies are strictly against. It is worth mentioning that Starbucks has already faced the dilemma concerning the economic growth versus the needs of the employees, which resulted in choosing the latter. As the given example, shows, the Starbucks is far from providing an exemplary leadership strategy, however, to the company’s credit, Howard Schultz, the Starbucks leader, has created the only enterprise where the needs of the staff are pout before the needs of the company and yet managed to enjoy tremendous success.