Does teamwork pay?

The interpersonal interactions of individuals in groups contribute greatly to the success of Starbucks.
Baristas and other workers at each Starbucks location make up a group, a collection of individuals who
interact with and influence each other. The Starbucks group is a command group, because the individuals
are brought together by their official positions and the group includes a store manager to oversee the
work of the others. Each store’s group of workers can also be a team, because they work toward a
common goal. Starbuck’s mission statement serve as the ultimate goal for employees and the statement
is prominently displayed at every location. Baristas often hear about the company’s commitment to the
mission statement’s values, such as caring for the environment, fostering innovation, satisfying
customers, treating others with dignity and respect, making a profit, and embracing diversity. Starbuck’s
executives communicate details about company performance and goals with employees to help
employees contribute to the firm. Employees share short-rage goals for sales, quality, efficiency, and so
on. Starbucks pays bonuses based on company – wide performance, further strengthening the team
concept.
Starbucks teams are fairly well developed, as members have worked together for some firm. Of course,
with an annual turnover of 80 percent, team membership changes frequently and there is a constant need
to teach new workers about the group’s norms. Starbucks provides twenty four hours of formal training
that introduces each new hire to the company’s value and culture. The first training also includes an
introduction to coffee. Baristas learn about different coffees and methods of coffee brewing. Later
training focuses on communication, leadership, and management skills. Another way that Starbucks
employees learn about group norms through direct interaction with peers. Starbucks has a “promote
from within” policy, so the store managers know the company’s culture ad can serve as role models.
Training also helps the company to enforce group norms. At Starbucks, norms include everything from
how to dress to how to manage difficult customers. The norms at Starbucks promote friendliness,
efficiency, and consistency, which aid the company in accomplishing its goals. However, some feel that
the strong norms at Starbucks result in too much consistency and stifle creativity and individual
expression. Group performance is improved by Starbuck’s diversity, where over 60 percent of the
workforce is made up of minorities and women. “Embracing diversity is not only the right thing to do
socially or ethically, it’s good for business,” according to former CEO Orin Smith.
In addition, workforce diversity makes it easier to attract and serve diverse customers. And seeking out
diverse applicants increases the applicant pool, making it easier to find personnel when the labor supply
is tight. Thus, Starbucks must recruit from a diverse population in order to find enough workers. To
recruit more diverse applicants, Starbucks visits colleges with high minority enrollment, builds
relationship with advocacy organizations, and places advertisements in publications with minority
readers.
Group cohesiveness is an important performance factor at Starbucks. The company works to increase
cohesiveness by careful recruitment procedures that identify individuals with outgoing, energetic, and
pleasant personalities. Also, store managers are trained in team building, where they learn to create a
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supportive and upbeat atmosphere. And Starbucks’s policy of internal promotions increases
cohesiveness, because store employees see managers as being similar to them.
Effective interpersonal processes aid the organization in leadership, decision making, and conflict
management. Leadership has been an important element of Starbucks’s success since 1985, when
Howard Schultz bought the small chain. Schultz had two visions, inspired by an experience with Italian
coffee houses, which he used to transform the lackluster company into the retailing giant it is today.
First, Schultz saw that Starbucks had the potential for tremendous growth. Second, he realized the appeal
of socializing, which is important to the success of European coffee houses. “Great companies must
have the courage to examine strategic opportunities that are tans-formational – as long as they are not
inconsistent with the guiding principles and values of the core business,” Schultz says.
Schultz has also demonstrated very effective transactional leadership in the years since he acquired
Starbucks. He has managed a great deal of growth, international expansion, the transition to a publicly
traded firm, and more. Schultz has demonstrated his transactional management abilities by his successful
efforts at product development, brand management, and operational efficiencies.
Founder Schultz and other top management are clearly excellent leaders, as demonstrated by Starbucks’s
long-term performance. Yet leadership at Starbucks occurs at many levels, of just at the top of the giant
firm. Schultz claims as one of his guiding principles, “Don’t be threatened by people smarter than you.”
Therefore, there is an emphasis at the company on development the team leadership skills of every
leader, down to the level of store managers.
Starbucks works hard to create positive personal interactions among its employees, but in a company of
this size, conflicts are inevitable. Workers need predictable schedules; managers need flexibility.
Workers demand freedom to speak and dress as they please; manager’s demand that company policies
and dress codes be upheld.
Starbucks prefers that workers are not unionized. Founder Howard Schultz takes the threat of
unionization personally. “If workers had faith in me and my motives, they wouldn’t need a union,” he
says. In the meantime the company continues its practices: training communicating, fostering diversity,
and developing leaders. So far, these have been more than sufficient generating growth and success for
Starbucks.
Q1. Identify the practices adopted by Starbucks to accomplish their goals? Which of them have you
experienced while working on the group projects? (10 Marks)

Q2. Citing examples from your own learning team do you think that team cohesiveness contributed
to the success of Starbucks? (10 Marks)

Q3. Drawing from the learning of Starbucks, how would you promote team culture in your
prospective organization? (10 Marks)

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