Starbucks

Proactive organizational behavior solutions to

motivate and upgrade employees
 Contents
Introduction……………...…………………………………………………………Page 02

Company Overview…………………………………………………...…………..Page 03

Proactive Organizational Behaviour solutions to motivate

and upgrade employees……………………………….……………Page 04 – Page 08

Advantages and Disadvantages of motivating

employees…………………………………………………………………………..Page 09

Conclusion……………………………………………………………………….…Page 10

References……………..…………………………...………………………………Page 11

Page 01
 Introduction
Organizational behavior (OB) is the study of human behaviors in organizations.
Business cultures may differ by company, industry and location, but most share a goal to
have a positive, productive organization with high employee satisfaction. Human resources
employees, managers and other leaders often use organizational behavior to understand
how teams work together, how the organization behaves and how individual employees act.
This assignment aims to provide a perspective on Starbucks Corporation in terms of
organizational behavior theory applied in the business. The coffee company is discussed
according to decision-making, organizational structure, organizational culture,
communication, and human resources. The combination of strategic plans in all of these
aspects is considered to be a determining factor in Starbucks’s success. Some specific and
actual implementations are discussed to shed light on how organizational behavior and
related strategies contribute to the success of the coffee business.
Starbucks Corporation (Starbucks Coffee Company) is a leader in the specialty coffee
retail market. The business has a strong market position and steady growth in sales, and has
a promising future in the long-term, attracting investments for its operations and the coffee
industry. With good potential and innovative strategies, it is without doubt that Starbucks
will continue its leadership position, and maintain the satisfaction of its mission and vision.
There are a few critical factors that support the coffee company’s success in the
industry. These include intensive market expansion, wide arrays of distribution channels and
innovatively differentiated products and services, as well as innovative implementations
inside Starbucks’s organization. The company’s strengths include its popular brand
reputation, high visibility of coffeehouse locations and its steady sales growth rate.
However, the corporation also has several weaknesses that hinder it from better business
performance, such as clustering or self-cannibalization among Starbucks branches (stores),
unpredictability of coffee prices, and relatively expensive retail selling prices.

Page 02
 Company Overview
Starbucks was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at
Seattle's Pike Place Market. During the early 1980s, they sold the company to Howard
Schultz who – after a business trip to Milan, Italy – decided to convert the coffee bean store
into a coffee shop serving espresso-based drinks. As chief executive officer from 1986 to
2000, Schultz's first tenure led to an aggressive expansion of the franchise, first in Seattle,
then across the West Coast of the United States. Schultz was succeeded by Orin Smith who
ran the company for five years and positioned Starbucks as a large player in fair trade
coffee, increasing sales to US$5 billion. Jim Donald served as chief executive officer from
2005 to 2008, orchestrating a large-scale earnings expansion. Schultz returned as CEO
during the financial crisis of 2007–08 and spent the succeeding decade growing the
company's market share, expanding its offerings, and reorienting the brand around
corporate social responsibility. Kevin Johnson succeeded Schultz as CEO in 2017. In March
2022, Starbucks announced that Schultz would return as CEO in April 2022 in an interim
role. Later that September, Laxman Narasimhan was appointed to succeed him in April
2023, with Schultz remaining a member of the Board of Directors. Narasimhan assumed the
position sooner than planned, in March 2023.
In addition to drinks and food, many stores carry Starbucks' official merchandise,
such as mugs, tumblers, scoops, and coffee presses. There are also several select "Starbucks
Evenings" locations that offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream,
and bottled cold coffee drinks are sold at grocery stores in the United States and other
countries. In 2010, the company began its Starbucks Reserve program for single-origin
coffees and high-end coffee shops. It planned to open 1,000 Reserve coffee shops by the
end of 2017. However, since succeeding Schultz, Johnson has scaled back the Reserve coffee
shops to only six to ten shops. Further development on Reserve coffee shops will be
dependent on the success of the few already in existence. Currently, Starbucks operates six
coffee roasteries with tasting rooms and 43 coffee bars as part of the program. The latest
roastery location opened on Chicago's Magnificent Mile in November 2019, and is the
world's largest Starbucks location. The company has been subject to multiple controversies
related to its business practices. Conversely, its franchise has commanded substantial brand
loyalty, market share, and company value.
The company is ranked 120th on the Fortune 500 and 303rd on the Forbes Global
2000, as of 2022.

Page 03
 Proactive Organizational Behaviour solutions to
motivate and upgrade employees
Partnership

To start, Starbucks always refers to their employees as “partners”, this practice

reinforces how every single person represents more than just regular workers and it doesn’t
matter if they’re on corporate or store jobs. This simple detail can boost employee’s morale
inside the company and provide that feeling of protagonist and impact on the success: “I
don’t just work there, I’m part of the business”.

But it’s not just the company that views employees as partners, coworkers also have
this culture and they’re really invested in the mission of being there for each other. This
feeling of partnership is key in the process of reinforcing teamwork, since “partners” begin
to view collaboration as the best path for success. The accomplishments are best when the
efforts are shared.

So, lesson number one from Starbucks teamwork efforts: it’s not particularly
necessary to come up with nicknames for your employees, but implementing a culture that
expresses their importance and the equality of protagonism is definitely a great approach to
encourage collaboration inside your team.

To understand more about the partnership culture at Starbucks, you can watch this
video about what it is like to be a Starbucks partner:

Another particularity about Starbucks is its valuable statement about being a place
that deeply cares about the workers. Partners claim to be treated with a lot of respect and
dignity, always being encouraged and developed along the way. They say that every day
brings an opportunity to overcome a new challenge, learn something new and grow as an
individual.

Page 04
Community

Another great strategy from Starbucks is their involvement in community service:

the company invests in programs designed to strengthen local economic and social
development. This is how the initiative works: the company allows some of its employees to
spend half of their workweek volunteering for a local nonprofit and still getting paid for their
time. These programs usually last for about 6 months.

The partners are encouraged and sponsored to volunteer in organizations and

participate in charity events. These external programs are known to integrate the volunteers
and are also a great way to make them come together for a bigger cause, nurturing that
sense of partnership and teamwork. When asked, a Seattle retailer said that employees who
feel connected and engaged in their communities are more likely to stay at Starbucks
longer.

The Starbucks Global Social Impact team is responsible for reaching out to programs
they find compatible with the company and executing the process of partnership. Some of
the benefits of this initiative are the increase in employee engagement, the development of
new skills, and the experience to serve as a model for an employer-led capacity-building
program that Starbucks and other corporate partners can scale globally in the future.

To see more about the Starbucks Community Programs you can visit this website
here. They have a section dedicated to the matter and the first thing you’ll see is an
institutional video exploring all about the experience and benefits of this inspiring initiative.

Diversity

The next lesson from Starbucks is to build the most diverse team possible. For them,
teamwork and diversity walk side by side because the company wants a universal
perspective. To show appreciation, Starbucks believes in inclusion and this is done by
encouraging diverse conversations and thinking. The partners say that difference is
celebrated because it boosts innovation.

For Starbucks, bringing different people together helps the business create
innovative products and solutions. By having a more diverse workforce, they’re solving the
needs of the larger community. Celebrating diversity is how Starbucks teamwork and
collaboration thrive.

Speaking of diversity, Starbucks is also really supportive of accessibility. They are

actively hiring individuals with disabilities and providing reasonable accommodations and
assistive technologies to enable people for their jobs. They even have an official channel for
partners to request assistance and more: the “Partner Networks” (also referred to as
employee resource groups) who work to create an inclusive environment across Starbucks
representing the broad spectrum of the partner’s backgrounds.

Page 05
Culture and values

Starbucks has an “Employee First” philosophy and it’s based on an important logic:
competitors can replicate the products, but they can’t replicate the experience that partners
provide when serving the customers. Starbucks also knows that employees that are treated
well, will, in return, treat customers well. As a matter of fact, it’s important to say that this
appreciation doesn’t only apply to store workers, but also to corporate employees, after all,
they’re partners too!

To keep all employees on the same page, Starbucks has an Employee Handbook that
is constantly updated. In fact, this type of manual is very common for a lot of companies
because they help with the onboarding and orientation of newcomers and older employees.
Starbucks has a Handbook with a few guidelines that are extremely important for the
business’s success. Here are some of them:

 Employee Motivation;
 Pay Structure;
 Employment Discrimination laws;
 Employee Performance review;
 Anti-Harassment guidance;
 Performance Management Process.

The complexity of these types of manuals helps to make sure that partners are fully
aware of the company’s dynamic, this way, they can integrate and understand how the
team behaves and how they’re expected to work.

Page 06
Benefits and appreciation

When it comes to appreciating employees, Starbucks promotes “a special blend of

employee benefits” and a work/life program that focuses on the physical, mental,
emotional, and creative aspects of each person. The company is known for rewarding
partners who achieve results and live its mission and values. Aside from that, it recognizes
employees’ contributions at all levels of achievement through formal and informal
programs.

One example of these programs is the “Bean Stock” reward, which consists of
allowing the partners to share in the financial success of the company through shares of
Starbucks stock. Bradley Honeycutt, vice president of HR Services said that Starbucks
established “Bean Stock” in 1991 as a way of investing in its employees and creating
ownership across the company. She added that this strategy has been key to retaining good
people and building a loyal team. Consequently, the level of bonding and work efficiency
was favorably impacted.

Another great example of how Starbucks values and encourages employees through
benefits is an initiative called the “Starbucks College Achievement Plan” in which eligible
partners can choose from over 100 diverse undergraduate degree programs at Arizona State
University online courses with the assistance of 100% tuition coverage by the company.

Talking about education, another Starbucks benefit is the “Tuition Reimbursement”

where the company helps partners by subsidizing their tuition, books, and fees so that they
can pursue advancement in professional development. The reimbursement can go up to
$1000 a year when the partner checks a few boxes, such as: having a minimum of 6 months
of continuous service and taking a course at an accredited educational institution towards a
certificate, diploma, or degree program.

Programs like these can help prepare employees for higher positions and bigger
accomplishments. Well-prepared partners can also boost their team’s performance because
they’re constantly applying the acquired knowledge to their work. And another advantage is
the fact that the support from an employer has the power to make someone feel considered
and appreciated, this feeling is transformed into gratitude and it is shown in the employee’s
dedication to the job.

Page 07
Taking care of the partners

Following the health orientations during the pandemic, Starbucks implemented

remote work for its corporate partners, and last year (2020), the company decided to
extend its work-from-home policy for the Seattle Headquarters employees. This work mode
is set to last until October 2021. But Starbucks affirmed that it envisions a more flexible
workplace, maybe even a smaller one, for when the activities return to “normal”.

To help with this process of adaptation, Kevin Johnson, CEO, declared that the new
layout will focus on emphasizing remote-working technologies and maybe include “hoteling
features” that will make it possible for employees to reserve parking spots or spaces where
they can work for the day. But, this decision is also based on a few other strategic factors…
Johnson said to the partners that “This is more than a health and safety measure, but an
intentional decision to help you manage your individual needs”.

It’s safe to say that this strategy intends to promote important new skills in the
workers, especially self-management and productivity. This measure can also strengthen
employees’ relationships since they have to improve their communication to not lose touch
with each other and keep the business developing.

As long as we’re talking about taking care of employees’ health, Starbucks partners
also are eligible for a universal benefits program that includes coverage from care plans and
the possibility to select dental and vision plans. This helps to keep the partners in their best
shape and condition, this way, they can give more and more dedication to the job. It’s a fact
that a complete and healthy staff will always represent the strongest teamwork efforts.

Recognition

Starbucks has a mindset to make sure that a partner feels that their impact was
seen. It even set some directions on how to do it:

 Timely: Delaying the recognition lessens the impact.

 Genuine: The recognition mustn’t feel forced or an obligation.
 Shared: Employees want their peers and leaders to know about their
accomplishments. Seeing someone being recognized also inspires the observer!
 Frequent: Partners should be thanked or praised regularly, it’s important to not take
them for granted.

Page 08
 Advantages and Disadvantages of motivating
employees
Traditional techniques of motivation such as the provision of better salaries and
health insurance have made it easier for many corporations to achieve their goals. However,
these techniques are not enough towards addressing the needs of the millennial generation.
Members of this generation have unique expectations, goals, and ideas that must be taken
seriously. That being the case, the use of extra strategies will encourage these workers to
maximize their inputs. Leadership has also changed significantly within the past two
decades. These new techniques appear to be aligned with the concept of democratic
leadership.

The other advantage of these techniques is that they reduce hierarchies in an

organization. The horizontal managerial structure promotes new practices and decisions
that can deliver quality results. Individuals whose meta-needs are satisfied will focus on new
researches and eventually make their respective companies successful. Unlike the
traditional methods of motivation, these new approaches promote diversity and
engagement. The development creates a positive culture thus making it possible for many
corporations to realize their business potentials.

On the other hand, leaders should take the most appropriate precautions whenever
using these unusual techniques of motivation. This is the case because the methods can
decrease the profitability of a company. For instance, individuals who use scooters in the
office might go further to compete with each other. The practice will minimize the amount
of time used to pursue the goals of the organization. The workers might find it hard to
formulate and support new goals.

Some unusual methods of motivation can eventually become costly for an

organization. For example, a company providing insurance cover for pets will have to incur
numerous expenses. This is the case because the health needs of the workers should be put
into consideration. Companies should, therefore, consider these issues before selecting the
most appropriate motivational strategy for their workers.

The use of these methods is a revolutionary strategy capable of making many

companies successful. The strategies empower and encourage more workers to focus on the
best practices. Some firms such as Google have managed to become leaders in their
respective markets. Companies using these approaches should combine them with other
traditional techniques (Alsop, 2010). The disadvantages of the methods should be carefully
understood before designing the most desirable motivational strategy. This combination will
ensure more companies realize their business objectives and goals.

Page 09
 Conclusion
Having performed a thorough analysis of the practices of Starbucks and its influence
on the motivation of the employees on the basis of the information gathered from the
interviews with the employees and the official websites of Starbucks, I have reached the
following conclusions. The practices of Starbucks have a positive impact on the motivation
of the employees by means of setting clear goals. Other aspects of this impact include
promoting teamwork, encouraging transformational leadership, including external
incentives, maintaining equality, offering benefits, and promoting self-efficacy. These
aspects give an employee the resource and means necessary for fulfilling the goals assigned
by managers.

However, the practices of the company execute a negative influence on the process
of setting and fulfilling goals by establishing exclusively pecuniary goals and employing the
“customer is always right” policy. My recommendations to Starbucks include the abolition of
such policy, as well as establishing learning goals along with performance goals and
adopting the proactive model of motivation.

Page 10
 References
1. Haddon, Heather (March 16, 2022). "Former Starbucks CEO Howard Schultz to Return as Chain
Faces Union Push, Rising Costs". The Wall Street Journal. ISSN 0099-9660. Retrieved March
17, 2022.
2. Brewster, C. (1994) European HRM: Reflection of, or challenge to, the American concept. In P.S.
Kirkbride (ed.) Human Resource Management. London: Rutledge, pp. 56-89

3. Butkus T. Raymond, Thad B. Green, (1999), Motivation, Beliefs and Organisational Transformation.
Quorum Books. Westport, CT.

4. Hanlan Marc, (2004), High Performance Teams: How to Make Them Work, Praeger.

5. Mele R. Alfred, (2003), Motivation and Agency, Oxford University Press.

6. Petrecca, L. (2011). Quirky perks for workers: pet insurance, massages. USA Today. Web

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