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Organization Profile: Starbucks

current as of 12/2/10, 8pm

Katy Brown

on 4 December 2010

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Transcript of Organization Profile: Starbucks

Starbucks: Human Resource Frame Frames Perspectives Organizational
Profile Operations Employees Customer Starbucks' use of the 6 Strategies Impressions at retail locatons Elements of Success
“Starbucks is a human company. That’s the difference there. The mission statement and the intentions are not just on paper. They truly are meant to be the way things get done. The biggest story at Starbucks is that it’s as much about people as it is about coffee.” - Paul Williams, Idea Sandbox (Michelli, 2007).
STARBUCKS stock rose 5,000 % from 1992 to 2007 Elements of Success I. Unique Corporate Culture:
Valuing employee labor
More money spent on training than on advertising

II. Passing of values to partners
involving employees in process: employees looked to for ideas and suggestions for improvement in customer experience
turning employees into shareholders: motivation for success
support employees: health insurance for 20+ hours a week

III. Corporate Commitment to Structure
Starbucks managers recognize the partners' accomplishments
Modeling patterned throughout corporation (METAPHOR???): President and CEO (2007) Jim Donald starts each day making recognition calls to partners in stores throughout the world

IV. Factors contribute to Positive Environment
Extremely low average employee turnover rate (120% less than industry standard)
82% Employee satisfaction rate - compared to 50% in industry (Hammers by Michelli, 2007). Human Resource Frame Theater as a Metaphor Works Cited
Mission & Policy Company Profile History global reach Numbers
Howard Schultz: Starbucks Chairman, President, CEO
- joined company in 1982
- inspired by model and Italian coffee bars, encouraged company to expand its market
- pioneered health care to PT employees and equity in company "What remains the same from that first cup of coffee: a connection, a conversation, and a sense of community." - 4 stores in 1982 to over 17K today
- newest markets in Middle East
- coffee production in several markets Starbucks has one united mission worldwide; to inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time. Missions & Policies For all citations not listed within presentation and for a full list, please see our webspace at: http://orlg505c.blogspot.com/ Shift supervisor Pat* has been at Starbucks for about 6.5 years. She has her master's degree in library sciences and works at Starbucks for the benefits, while she waits for an open position.

When asked to choose between comparisons of the organization, Pat believes that Starbucks can be best described as a symphony, where each role is a valuable portion of overall production. Like the majority of interviewees, Pat says that Starbucks values the skill development and personal relationship as well as the needs of the employee. Pat sees the manager as an image of empowerment, rather than inspiration and states her basic leadership challenges stem from aligning the needs of Starbucks with the needs of the employees.

Like the other employees interviewed, Pat generally states her positive belief in the use of the Human Resource Frame by Starbucks.

She strongly agrees with statements that speak to proper leadership, inspiring tasks, and empowerment in work environment. Interestingly, she reported a neutral response when asked if her supervisors provided her with resources in order to do her job.

Pat also rated the Starbucks Symbolic Frame integration low.
She does feel her job has importance but she does not see that same passion in other employees and strongly disagrees with the statements: "Starbucks employees are passionate about their work and are good at inspiring that passion in others." and "I feel that Starbucks is successful because everyone sets their personal goals aside for the betterment of the team." However, Pat feels the skills she has learned at Starbucks in management and customer service have provided great benefit for the future.

*not real name Symbolic Frame “The symbolic frame distills diverse ideas”(Bolman & Deal, 2007)
Look at the meaning behind events and symbols; what do they express?
Symbolic frame uses rituals and symbols to reinforce ideals, integrate participants
Searching for meaning has positives and negatives
- When facing uncertainty, people can be helped by looking to symbols for inspiration
- But, high levels of ambiguity threaten rationality and upset decision making
When facing uncertainty, people create symbols to increase predictability. Activity and Meaning Together Theater with leadership of inspiration Black Apron
symbol of employee success Starbucks company logos: symbols evolve with organizational or economic change family, leadership, empowerment unites needs of people and organizations
made up by people = organizations' complexity Core assumptions (Bolman & Deal, 2007) Organizations exist to serve people
Conflict of interests = no one wins Manager

SECOND INTERVIEW Barista Jane* chooses to compare Starbucks to a family, where each employee is just as important as the bottom line. She feels that Starbucks values the skill development and personal relationships between employees and customers. As a barista, her leadership challenges include creating an atmosphere of faith, beauty, and meaning.

When asked to rate her satisfaction with Starbucks, (in questions designed to represent the Human Resource Frame) Jane indicated her faith in the shared sense of purpose for the whole team, and has no reservations in the leadership at her work environment.

Jane believes Starbucks does a fine job at relaying core values and beliefs to its employees. However, Jane strongly disagreed that Starbucks uses any sort of symbolic device to reinforce its organizational values and missions. Furthermore, while Jane may feel the leadership is satisfactory, when questioned about motivation and team function, Jane indicated that employees may not feel their job is important and lacking passion, may not be able to fully commit to the team betterment.

*not real name Employee Interview Process Numbers Manager Employee

Avanel has a "passion for serving" naturally enjoys his career at starbucks, where he has worked for 5+ years. He describes it as "challenging at times" but admits, "that comes with the territory." Avanel reports he "would not trade this career for anything"

He describes his company as "family, where the employee is just as important as the bottom line." Starbucks, he says, values "skill development, personal relationships, and the needs of the employee"

As a manager, he believes that his basic leadership challenge concerns "aligning the needs of Starbucks with the needs of the employees." Jerome has been at Starbucks for 1 year. He aspires to become a surgeon and while he sees Starbucks as a great company, it is also a temporary career for him. While an employee, he appreciates the experience of "how to serve with excellence."

Jerome sees Starbucks as a symphony, where each role is a valuable portion of overall production. He sees the role of a manager as one of inspiration, unlike the manager interviewees and does not see his role as an employee as someone empowered to make decisions about his work environment.

However, he strongly believes in the Starbucks leadership structure sharing a sense of direction and purpose.

Through leadership, he feels conflicts are dealt with appropriately and he receives all the resources necessary to complete his job well. While he feels his job is very important and feels that others put aside their personal goals for the betterment of the team, he neither agrees nor disagrees with the statement, "Starbucks employees are passionate about their work and are good at inspiring that passion in others."

When asked if he enjoyed his experience at the organization, Jermone stated: "Oh yes for the most part it has been good." When our interviewer asked him to clarify, he said, "Yes, this job does not challenge me in ay way. I am simply here because I am in college and I need money." When asked if he would recommend the organization to a friend, he replied "Yes. As a matter of fact I would not mind owning a Starbuck franchise."

Avanel has a "passion for serving" naturally enjoys his career at starbucks, where he has worked for 5+ years. He describes it as "challenging at times" but admits, "that comes with the territory." Avanel reports he "would not trade this career for anything"

He describes his company as "family, where the employee is just as important as the bottom line." Starbucks, he says, values "skill development, personal relationships, and the needs of the employee"

As a manager, he believes that his basic leadership challenge concerns "aligning the needs of Starbucks with the needs of the employees." I. Invest in People

II. Train, Educate

III. Develop Measures of HR Management

IV. Share the Wealth

V. Provide Autonomy and Participation

VI. Focus on Job Enrichement Incentives include higher-than-average + healthcare
Promotion from within the store = employees feel dedicated to quality work Schultz one of first CEOs to offer stock options and benefits to part-time employees (starbucks.com) CEOs make their time available to employees; partners encouraged to make product suggestions Motivations for partners include benchmark titles and
'symbols of success' (such as black apron). Supports education of partners, thorough product knowledge, participation in events (ie tasting competitions)

Many long-term employees praise Starbucks because of the positive and nurturing family-feel. Starbucks may present a facade of a family atmosphere but it cannot reproduce the family experience. It assists in directing this production because it relies on its partners for financial success. If both people and organization are not supported, both will fail (Bolman &Deal). Like the players in a theater, individuals at work start to feel as if they are a part of a group which makes their work seem meaningful: people dedicated to customer service - or 'performing' for the public.

The public relations campaign would have one believe the aim of Starbucks is nothing more than connecting people over coffee (starbucks.com). News of protests in the Middle East appears on a separate site away from the news of success (Starbucksnews.com) Starbucks produces feeling as a product. It carefully grooms and supports people under the HR frame. It models its aprons like costumes, to be recognizable symbols of the organization. Naturally, Starbucks could not operate as a successful global operation without manipulating the public or the employees. The partners gladly participate in the pageantry - the pleasurable experience of customer service, the comfort and familiarity of organizational symbols – because of the perceived support for their wellbeing. The company would fail to thrive if the individuals did not participate.

Faced with slumping sales and bad PR in some of its markets, Starbucks simply opened up new stores 'in the spirit of Starbucks' that were branded "stealth Starbucks" and eliminated large logos and recognizable colors and created a template for a popular, independent-type coffee shop (seattlepi, 2009). Stores were overhauled to blend into the market, replacing employees and staff to fit the local feel of quirky Seattle neighborhoods. It is clear that while it prizes quality performance overall, its actors are replaceable. What Starbucks produces is greater than coffee; embodying the metaphor of a traveling theater, for Starbucks, the 'show must go on.' Starbucks has shown that it is able to grow, reinvent, and adapt (the show must go on). Human Resource Frame Symbolic Frame Envisioning Political Frame Summary The Theater is often used as a metaphor in the Political Frame due to its use in enacting political drama and image creation. Appearance-wise, Starbucks embodies a symbolic and human-oriented theater organization (Terry, 1997). Starbucks relies on individual 'casts' of employees to support its organization and its structure depends on the formal characterization and performance aspect of its 'partners' for financial success. Employees feel a greater kinship in the organization if their environment feels less like a corporation and more like a family. Like players within a troupe, they favor the close ties they share with their team members. Furthermore, research shows how they find a great deal of security in the offerings that Starbucks makes.

Starbucks actively promotes its rituals and symbols to encourage positive respones from employees (longevity at company) and promote brand-loyalty from consumers. For employees, the symbolic value of time-based, non-monetary promotions (such as the black apron) is personally valuable. And (arguably) the symbolic value of using certain labor and trade sources sources - such as Ethiopian farmers - is a "particularly effectve" strategy for the organization(Holt, 2005). Even as Starbucks attempts to lobby to take control over Ethiopian industry, it still makes a huge profit in marketing the beans by "tapping into the ethical symbolism that Starbuck's customers find increasingly appealing"(Holt, 2005). Starbucks stages a creative way to promote its belief in global care for all people, while still making a profit.

According to employee-research, Starbucks projects it's organization to be firmly rooted in the Human Resource Frame. The individuals gain a sense of security from health-benefits and stock options and has a huge symbolic value to qualified employees looking for career prospects. The positive people-oriented policies land the organization on many 'best places to work' lists. Starbucks in 2005 announced it's spending on health benefits exceeded the amount spent on coffee beans. But instead of damaging the reputation it had built through the Human Resource Frame, the organization "announced it would lay off 6,000 employees and close 300 stores"(PFCD, 2009).

Clearly, when examined more closely, the outward appearance of the Starbucks peformance differs with a 'behind the curtain' look at the organization. With the promotion of image and facade of full comittment to valuing people makes Starbucks more in tune with the political theater than previously thought; rather than seeing this as a negative trait, for organiational structure, this speaks to the balance of the organzation. According to Bolman and Deal, (2007) organzations in their complexity are naturally deceptive and seek to camoflauge surprises. The careful and motivated use of the Human Resource and Symbolic frames supported by the Political Frame shows the way Starbucks exists - balancing policies and leadership by the Structure Frame. Judging by the numbers of Starbucks, brand loyalty, and its employee ratings, this is what creates a successful organizaton. Methodology: Interviewees (2 managers, 2 baristas) chosen at random by two group members living in different states. Subjects were interviewed on site and face-to-face, using prewritten script.

Each interview utilized a three part questionnaire to determine if the respondent believed that the organizational structure of Starbucks more closely aligned with the Human-Resource or Symbolic frame. The first section of the questionnaire asked participants to select which of two statements more closely aligned with there perceptions of Starbucks operation. The second section asked the participants to use a five point Likert-Type scale to determine how much they agreed or disagreed with a given statement. The third section allowed the participants to provide any additional feedback that wasn’t assessed in the first two sections.

Results indicate that both the Managers and Baristas felt that Starbucks more closely aligned to the Human-Resources frame; however the Managers appeared to be more definitive in this assertion. The data collected to reflect the customer opinions was gathered from the personal experiences of the group members as well as various consumer websites. Perspectives of Frames

Ethical Sourcing
engaging in responsible growing practices
supporting and educating farmers
Community Involvement
contribute to postive change in communities
prioritize partnership with minorities through Diversity Supplier program
youth programs to engage community interaction
support employee volunteering
Global Stewardship
reduce environmental footprint with help from business partners
create programs for recycling and reusable products in stores
assist farmers in dealing with carbon markets "to generate additional income"(starbucks scorecard, 2009) Mission to "inspire and nurture human spirit"(starbucks goals, 2009). largest coffee company in world

operating budget: 9.77billion
operating income: 476 million
employees: 128,000+
stores: 17,000+ in 49 countries
total assets: 5.58 billion Company Statistics 2009
Founded 1971 in Seattle by three partners with intent sell upscale coffee equipment. The name taken from Moby-Dick to reflect nautical culture of town. Build and Implement an HR Strategy Starbucks Position: We understand, respect, appreciate and include different people. We hear each partner’s voice. And we learn from each other.
A Starbucks career is a journey that starts with learning about coffee, often at our roasting events and tastings. We’ll help you learn how to help our business – and our partners – grow and thrive. And we believe in keeping each other informed, so our senior leaders regularly hold 'Open Forum' events to answer your questions.
a well-defined strategy found on starbucks.com Core principles: We want passionate people who love coffee . . . We're looking for a diverse workforce, which reflects our community. We want people who enjoy what they're doing and for whom work is an extension of themselves."
Some 80 percent of Starbucks employees were white, 85 percent had some education beyond high school, and the average age was 26.
http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html Starbucks Position: Starbucks Position: Starbucks Position: Starbucks Position: Starbucks Position: Compensation can include:
Competitive pay
Insurance: medical, prescription drug, dental, vision, life, disability; domestic partner benefits
Bonuses and Paid time off
Retirement savings plan
Stock options and discounted stock purchase plan
Adoption assistance
Emergency financial aid
Referral and support resources for child and eldercare
A free pound of coffee each week
http://assets.starbucks.com/assets/benefits-guide-12-29-09.pdf Invest in Them Partner/Barista: Every partner/barista hired for a retail job in a Starbucks store received at least 24 hours training in the first two to four weeks: classes on coffee history, drink preparation, coffee knowledge, customer service,, and retail skills, and "Brewing the Perfect Cup."
Management: Management trainees attended classes for 8 to 12 weeks. Their training went much deeper, covering not only the information imparted to baristas but also the details of store operations and the basics of managing people.
Starbucks' trainers were all store managers and district managers with on-site experience. Objectives included ingraining the company's values, principles, and culture and to impart their knowledge about coffee and their passion about Starbucks.

http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html Empower Them Promote Diversity Hire the Right People Keep Them Empowerment - Starbucks empowers all partners to make decisions that impact our reputation.

http://assets.starbucks.com/assets/sobc-english-2010.pdf Diversity at Starbucks - Aside from extraordinary coffee, Starbucks has made a business out of human connections, community involvement and the celebration of cultures. We're committed to upholding a culture where diversity is valued and respected. So it's only natural that as a guiding principle, diversity is integral to everything we do.

http://www.starbucks.com/about-us/company-information/diversity-at-starbucks Interviewees at Starbucks locations
Louisa- The atmosphere was nice it was cozy, it made you feel welcome. The service was great but, the taste of the coffee was not my preference. (location: Yorktown heights, NY)
Juan- Everything about Starbucks is excellent. (location: Hawthorne, NY)
Robert- The coffee was horrible. The service was good, they are very organized. (location: White Plains, NY)
Vanessa- Usually easy to order, sometimes the lines are long. (location: Tarrytown, NY)
Chris- It’s alright got what I need when I need it. ( It’s better than Dunkin Donuts) (location: White Plains, NY)
Orly- The atmosphere was nice, causal, laid back, not noisy. It’s a bit pricey but, the coffee is good.(location: White Plains, NY)
Amelia- The quality of the coffee is not the best. (location: Queens, NY)
Nadia- I like their coffee it is really good. (location: Queens, NY)
Palmira- Expensive but, great coffee (location: Queens, NY)
Alfred- The atmosphere was relaxing, the service was excellent. (location: NY, NY)
Robert - I return because of the consistency in my drinks. I can never count on my drinks being the same anywhere else. (location: Seattle, WA)
Carrie - The store always looks clean and the cashiers never harass you for tips. (location: Seattle, WA)
Tyler - I prefer other coffee but Starbucks is easy to get to. (location: Seattle, WA) History
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