Question No.

1: What management skills do you think would be most important for Howard Schultz to
have? Why? What skills do you think would be most important for a Starbucks store manager to have?
Why?

Howard Schultz is the chairman and CEO of Starbucks, meaning he is responsible for making
organization-wide decisions and establishing plans and goals that affect the entire organization. That
means that for him, conceptual skills are most important, he needs to use information to solve business
problems, have a vision were is his company going and how to improve situation in the whole company.
Also, human skills are very important for Howard Schultz because he is the president of the company, he
has a lot of people working for and with him, so he needs to know how to manage all of his employees,
how to motivate them and enable successful completion of the tasks. For a Starbucks store manager,
technical skills are most important, because he is one of the first-line managers, he is directly involved
with servicing customers. Store manager is mostly working with nonmanagerial employees, so human
skills are also quite important.

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Question No.2: How might the following management theories/approaches be useful to Starbucks:

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scientific management, organizational behavior, quantitative approach, systems approach?

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← Scientific management Definition: the use of scientific methods to define the "one best way" for a job
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to be done. Aim: to improve production efficiency. Way: put the right person on the job with the correct
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tools and equipment, make workers follow instructions exactly, motivate with an economic incentive of a
significantly higher daily wage. Apply to Starbucks: Starbucks managers analyze the basic work tasks that
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must be performed, use time-and-motion study to eliminate wasted motions, hire the best qualified
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workers for the job, and design incentive systems based on output.
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← Organizational behavior Definition: the field of study concerned with the actions of people at work.
Aim: people are the most important assert of the organization and should be managed accordingly.
Foundations: employee selection procedures, employee motivation programs, employee work teams,
and organization-environment management techniques. Apply to Starbucks: from the way managers
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design motivating jobs to the way they work with employee teams to the way they use open
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communication.
← Quantitative approach Definition: the use of quantitative techniques to improve decision making.
Aim: to improve decision making. Apply to Starbucks: when Starbucks managers make budgeting,
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scheduling, quality control, and similar decision, they rely on quantitative techniques. They may at first
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hand out questionnaires and collect the data, then build math models to analyze.
← System approach Definition: the organization takes in inputs from the environment and transforms or
processes these resources into outputs that are distributed into the environment. Apply to Starbucks:
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Starbucks managers coordinate the work activity of the various parts of the organization and ensure that
all the interdependent parts of the organization are working together so that the organization's goals are
achieved. They have to make sure that every branch of Starbucks shares the same principle and same
character.

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 Question No.4: Give examples of how Howard Schultz might perform the interpersonal roles, the
informational roles, and the decisional roles.

← The Interpersonal roles:

Contact with the employees and visit the branches worldwide.

To strengthen the relationship with the employee and collect the new information for the company,
Schultz will visit over 20 Starbucks stores per week. Also, he gets up at 5:30am in the morning and
contact with the “partners” all around the world through the phone.
← Travel around the world and deliver speeches
On September 11th 2009, Schultz came to China and joined the meeting of APEC，during which time he
shared his company’s opinion about customer service and the success of Starbucks. After that, he came
to Fudan University and delivered an inspiring speech to the students and other audience presented at
the meeting.

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← Provide great care for the employees

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Schultz insisted that all employees that are working at least 20 hours a week get comprehensive health

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coverage - including coverage for unmarried spouses. He introduced an employee stock-option plan,

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which moves boosted loyalty and led to extremely low worker turnover, even though employee salaries
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← The informational roles
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Go abroad and found out the idea for a coffee bar

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This one occurred in Italy, when Schultz took note of the coffee bars that existed on practically every
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block. He learned that they not only served excellent espresso, they also served as meeting places or
public squares; they were a big part of Italy's societal glue, and there were 200,000 of them in the
country.
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← The Decisional roles

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As an alternative manger with original thoughts, Schultz has been made many creative decisions.
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Including: cooperate with Kraft foods to supply the coffee beans, associate with PepsiCo to supply the
coffee in plastic bottle, work with Dreyer’s to produce coffee ice cream and sell the credit card with
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VISA…

← Disturbance handler
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Due to several of reasons, Starbucks once enlarged at a dangerous speed and then caused several
serious negative outcomes. Thus in 2008, facing the financial crises, Schultz decided to close thousand of
stores and laid of over 10,000 employees, which has never existed in the history of Starbucks. Though
with plenty of criticism, this decision made effect and turned the company around.

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 Question No.6: Go to the company’s Web site (www.starbucks.com) and find the list of senior officers.
Pick one of those positions and describe what you think that job might involve. Try to envision what
types of planning, organizing, leading and controlling this person would have to do.

One of the Starbucks top executives is Peter Gibbons, Executive Vice President, in charge of global supply
chain operations. The main issues which global supply chain operations concern is purchase order
management. It regards purchase order as the basic unit in the transportation of goods. One typical
methods used in the operations is consolidation which means gather all the separated goods and then
send them out together. These goods may come from different consignors but will be sent to the same
consignee.
About the executive vice president of global supply chain operations, I think this job may involve the
following things，

← Make sure what kind of materials they need

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← Find some stable suppliers of these kinds of materials

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← Define the quantity of the purchase order

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← Create the most efficient and effective transportation routes of the materials

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← Determine who is to do the work. There are many positions in the operations. The senior officer’s job

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is to find out the appropriate person for the specific position.
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← Determine who reports to whom. This person need to know whether a purchase order has been
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finished or not. In addition, if there are some mistakes in the supply chain operations, he will find out the
mistake and the person who makes the mistake at once due to the legible reports. So the mistakes can
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be corrected immediately and won’t bring too much loss.

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← Monitor actual performance and compare actual to standard. Has some pretty specific bn jb
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Question NO8: given this, do you think mangers would be more likely to make rational decisions ,
bounded rationality decisions, or intuitive decisions? Expalin.
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Managers that work for Starbucks are able/allowed to make rational decisions when they are at work.
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This allows managers to react to what they think is the best way to approach a situation. Also, this can
make the managers of the store feel as if they are more in charge because they can make bold decisions
within the company’s rules. This is what puts Starbucks about everybody else in the coffee house
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business, with their unique way of running a business; Starbucks can have trust in their employees to
make the right decisions. This doesn't just apply to managers, employees also have the authority to
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make decisions on their own. This makes working a whole lot better when your allowed to make
decisions on your own and not get in trouble for it. There is also some risk with allowing employees to
make rational decisions, because there are some people out their that don't have any common sense to
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make decisions that are rational. So what this means is that they have to be very careful when hiring and
new employee, they have to have that "it" factor about them. Honestly when you walk into Starbucks
anywhere in the world you are greeted with respect and you always feel welcome. When you have
employees that make their customers feel like that you don't have to make rational decisions that often,
but when employees do have to make decisions they are bright enough to do so.

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 Question NO9: Give example of decisions that starbucks managers might made under conditions of
certainty. Under conditions of risk. Under conditions of uncertainty.

← Certainty: When starbucks decide to provide their employees stock options, the managers are sure
proper praise would enhance the employees’ passion and loyalty.

←Risk: mangers may offer the coffee-flavored ice cream for a season to test the outcome and get
information about other similar stores’ experience of selling coffee-flavored ice creams.

←Uncertainty: The company launched the starbucks prepaid card. More than 77million prepaid cards
have been activated and loaded with more than $1 billion. Mangers are not certain about the outcome.
Whether their customers will pay some time later when in economic crisis; whether Starbucks will be in
dept or not; how many customers are there dissatisfying the cards.

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