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Published by: Jlyn Coma on Mar 16, 2013
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Starbucks- Defining the Terrain

As managers manage, they must be aware of the terrain or broad environment within they plan, organize, lead and control. The characteristics and nature of this “terrain” will influence what managers and other employee do and how they do it. And more importantly, it will affect how efficiently and effectively managers do their hob coordinating and overseeing the work of other people so that goalsorganizational and work-level or work unit- can be accomplished. What does Starbucks’ terrain look like and how is the adapting to that terrain? Starbucks Culture and Environment

An organization’s culture is a mix of written and unwritten values, belief, and codes of behavior that influence the way work gets done and the way that people behave in organizations. And the distinct flavor of Starbucks’ culture can be traced to the original founders’ philosophies and Howard Schultz’s unique beliefs about how a company should be run. The three friends ( Jerry Baldwin, Gordon Bowker, and Zev Siegl) who founded Starbucks in 1971 as a store in Seattle’s historic Pike Place Market district did so far one reason: they loved coffee and tea and wanted Seattle to have access to the best. They had no intention of building a business empire. Their business philosophy, although never written down, was simple: “ Every company must stand for or what they think they want; and assume that your customers are intelligent and seekers of knowledge.” The original Starbucks was a company passionately committed to world-class coffee and dedicated to educating its customer, one on one, about what great coffee can be. It was these qualities that ignited Howard Schultz continues to have that passion what Starbucks could become. Schultz continues to have that passion for his business- he is the visionary and soul behind Starbucks. He visits at least 30 to 40 stores a week, talking to partners (employees) and to customers. His ideas for running a business have been called “unconventional,” but Schultz doesn’t care. He says, “we can be truly be extremely profitable and competitive, with a highly regarded brand and also respected for treating our people well. “One member of the company’s board of directors says about him, “Howard is consumed with vision of Starbuck. That means showing the good that a corporation can do for its workers, shareholders, and customers.”

The company’s mission is as follows: “To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.” What are those principles that guide the decisions and actions of company partners from top to bottom?    Provide a great work environment and treat each other with respect and dignity Embrace diversity as an essential component in the way we do business Apply the highest standards of excellence to the purchasing, roasting, and fresh delivery of our coffee

C. As Starbucks continues its global push. That’s what sets us apart and give us a higher quality employee. health care costs and tax breaks. which in turn improves the social and economic situation in their respective country. but he recognizes that such efforts could be important to the company’s future/ Global challenges Starbucks does business in 36 countries outside of the united states (as of May 2006). but it also must address staffing issues as well. He treasures those relationships and feels that they’re critically important to the way the company develops its relationships with its customers and the way it is viewed by the public. India. For instance.” these emerging market have a great deal to offer. It’s something that Schultz didn’t really want to do. D.C.” Starbucks’ 115. possessing. It probably shouldn’t come as surprise that Starbucks has lowest level f employee attrition (leaving) of any national retailer.” . Schultz immediately flew there to handle the situation. it not only has to be concerned with the product. It recently began lobbying legislators in Washington . Starbucks provides all employees who work more than 20 hours a week health care benefits and stock options. in many cases an eager workforce keen to be better their lives. he decided that all future profits from that store would go to organizations working victims’ rights and violence prevention. One using that’s been important he has with his employees. Brazils.S. “We know that our people are the heart and soul of our success.”And Starbucks does care about its employees. He says. and Russia. That’s a lot of opportunities to either satisfy or disappoint the customers. In addition. That’s why Starbucks has created a unique relationship with its employees. on issues including lowering trade barriers.   Developed enthusiastically satisfied customers all of the time Contribute positively to our communities and our environment Recognize that profitability is essential to our future success Starbucks’ culture emphasizes keeping employees motivated and content. when three Starbucks’ employees were murdered in a botched robbery attempt in Washington D. The experiences customers have in the stores ultimately affect the company’s relationships with the customers. Much of the company’s future has targeted four markets for major global expansions: China. The president of Starbucks Coffee international says. They are rich in culture heritage. market. and untapped resources. an employee that cares more. “The most important thing I ever did was give our partners (employees) bean stock (options to buy the company’s stock). Starbucks’ executives recognize they must be aware of the impact the environment has on their decisions and actions.000-plus employees worldwide serve millions of customers each week. Schultz says.. As a global company with revenues well over $6 billion. even though about 85 percent of Starbucks’ revenues come from the U..

Social Responsibility and Ethics Good coffee is important to Starbucks but equally important is doing good.Starbucks entered the Chinese market in 1999 and currently has 140 stores there. A Chinese court ordered the imitator to pay Starbucks rmb500. We jointly fulfill this commitment with partners (employees). the partner guide. and health standards manual) to help them in doing . Contributing positively to our communities and environment is so important to Starbucks that it’s a guiding principle of our mission statement. at all levels of the company. All store employees (partners) have resources (“standard of business conduct. protecting. One of the major problems that Starbucks encountered in China – an imitator by the name Shanghai Xing Ba Ke Coffee shops (loosely translated as “Shanghai Starbucks”) that were creating customers confusion. Each top-level manager who has financial responsibility signs a “Code of Ethics” that affirms his or her commitment to balancing. Starbucks takes that commitment seriously. “Corporate social responsibility. society. It’s the way we do business. These reports aren’t simply a way for Starbucks to brag about its socially responsible actions.has been resolved. by getting involved together to help build stronger communities and things that Starbucks has done in relation to its corporate responsibilities:        Requires its stores to donate to local causes and charities Made part-time employees eligible for health and 401(k) benefits Works to protect the rainforest Introduced recycled-content paper cups in early 2006 Introduced a bottled-water product called “ethos” and will donate 5 cents per bottle sold to boost clean-water supplies in poorer countries Provided assistance to coffee farmers and their families in southwest Mexico and northwest Guatemala after hurricane Stan in October 2005 Launched an international program to offer better pay to coffee farmers who treat their workers and the environment decently In 2001 the company began issuing an annual corporate social responsibility report. which addresses the company’s decisions and actions in relation to its products.000 ( approximately $62. This trade mark protection victory was an important one for Starbucks.000) for copying the Starbucks name and logo. which it feels as an accomplishment given the fact that this is a country of tea drinkers. Starbucks also takes its ethical commitments seriously. the environment and the workplace. security. and preserving stakeholders’ interests. the safety. However. Its web site states. Starbucks feels there are untapped opportunities as China becomes stronger economic force and as young newly affluent urban Chinese workers embrace drinking quality coffee products. but are intended to stress the importance of doing business in a responsible way and to hold employees and managers accountable for their actions.

Wal-mart calls its employees associates.their jobs ethically. Describe some of the specific and general environmental components that are likely to impact Starbucks. What stakeholders do you think Starbucks might be most concerned with? Why? What issue(s) might each of these stakeholders want Starbucks to address? 8. What has made Starbucks’ culture what it is? How is that culture maintained? 4.) Why or why not? 13. Does Starbucks encourage a customer responsive culture? An ethical culture? Explain. What types of global economic and legal – political issues might Starbucks face? 10. 5. Discussion questions 1. And the company created a process for employees to raise complaints concerns they may have over questionable accounting and internal accounting controls.com) and find the latest Corporate Social Responsibility Annual Report. How would you classify the uncertainty of the environment in which Starbucks operates? Explain. Why do you think Howard Schultz is uncomfortable with the idea of legislative lobbying? Do you think his discomfort is appropriate? Why or why not? 9. How effective is Starbucks at recognizing and managing its terrain? Explain. 7. Go to the company’s Web site (www. Describe and evaluate what the company has done in this key area. . 6. What do you think the company’s use of the term partners instead of employees implies? What’s your reaction to this? Do you think it matters what companies call their employees? (for instance. 11. 3. Choose one of the key areas in the report (or your professor may assign one of these areas).starbucks. You’re responsible for developing a global cultural awareness program for Starbucks’ executives who are leading the company’s international expansion efforts. Do you think Howard Schultz views his role more from the omnipotent or from the symbolic perspective? Explain. 12. Describe what you think will be important for these executives to know. What does Starbucks’ terrain look like and how is the company adapting to that terrain? 14. 2. What do you think of the company’s guiding principles? Describe how the company’s guiding principles would influence how a barista at a local Starbucks store does his or her job. Describe how these principles would influence how one of the company’s top executives does his or her job.

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