The corporate culture of a business directly affects many different aspects of an organization. Starbucks has recently made changes based on their culture that is taking them in a whole new direction. CEO Howard Schultz has altered the corporate culture to invoke changes throughout the company. We will discuss how corporate culture affects diversity, organizational structure, employee relations, corporate citizenship and organizational ethics. Furthermore, we will discuss how corporate culture affects the networking aspect of Starbucks and the renewed focus on the customer.
Starbucks actually isn’t a ‘franchise’, it offers a variety of gourmet coffee flavors and teas for a variety of different customers. Some of these customers who are considered ‘repeat customers’ are college students, healthcare professionals, customers who frequently shop at malls across the nation. Starbucks customers come from all nationalities and are not limited to a certain region but they spread around the world.
Starbucks regularly discuss and strategize to enhance the benefits for their customers, employees and management. Business culture is centered around the customer. Starbucks encourages customer feedback on services and products they received. They also welcome new ideas and recommendations from customers in order to improve customer services and products.
The CEO Mr. Schultz has changes at the corporate level resulting in a flatter organization by opening new positions to focus on customers. These new positions include a Global Real Estate Design manager who will be in charge of communications, corporate social responsibility and public affairs. Global Strategy is the responsibility of Michelle Gass, who will ensure transformation of organization. Chet Kuchinad will head The Human Resource Strategy which includes the implementation of new store level positions. The customer experience which includes store design and merchandise will be the responsibility of Harry Roberts. Terry Davenport, and he will be responsible for the marketing and brand strategy. This includes product development, and consumer insight and unifying the Starbucks brand to the customer.These new positions have been designed to enhance the customer experience by reconnecting with what customers want.
As part of their restructuring, new positions have been made to enhance the customer experience and to “reconnect with customers”. New positions have been designed to enhance the customer experience by reconnecting with what customers want. With this new flatter structure, the idea is to be able to make changes to business strategy more efficient and more effective.
Starbucks has developed and launched a social networking site called MyStarbucksIdea.com that takes the Starbucks Experience outside the store and enables customers to play a role in shaping the company’s future.The My Starbucks Idea social networking site was launched in March of 2008 and has received over 70,000 posts for new ideas since its inception . Offers customers the unique opportunity to shape the future of Starbucks through sharing their ideas on such issues as what food products to offer to new and flavorful drinks that they would like included in the menu. Site provides customers the ability to provide ideas on products and service but it also allows them to share their ideas on such areas as community involvement, social responsibility and marketing techniques
Starbucks organizational ethics support the company’s six point mission statement which are reflected in the day to day operations and resonate as an integrated part of corporate culture at Starbucks. Mission statement is used as a “guiding principle and holds it up as a filter for decision making”. Corporate culture and organizational ethics are introduced once a job applicant has successfully made it through the stringent screening process. Prior to working in the store, employees go through mission statement, customer service theory and corporate culture training. Applicants then take the “Starbucks New Partner Training Plan” comprising of onsite training of ethics, ergonomics, safety, legal compliance, shift and practical hands-on training such as making drinks, product knowledge and other operational procedures. Money that is invested in employee training is designed to reinforce the mission and goals of Starbucks while socializing employees to organizational culture.
Starbucks promotes frequent visits from area and regional managers, encourages employees to communicate on a regular basis by submitting comments, concerns and ideas Employees are reminded also to be mindful of the six point mission statement and question decisions that run contrary to the content and purpose of the mission. Employees are referred to as “partners” epitomizing the value of the relationship and a term which is used to empower and to motivate active participation in working towards organizational goals. Starbucks shows appreciation by rewarding its employees by providing both full and part time employees with medical, vision and dental insurance, 401k plan, stock options, tuition reimbursement, vacation and of course, free coffee. The company also uses profits from Starbucks logo merchandise to support employee services and social activities.
Starbucks’ organizational ethics have motivated employees to implement the Starbucks Experience which provides exceptional customer service. The employee turnover rate is significantly lower in comparison to other food and beverage companies providing quick service. Starbucks experiences a 20% manager and 80% employee turnover rate while the average for other food and beverage quick service industry is 200%. Employee satisfaction surveys reveal that employees are satisfied and enjoy working in the Starbucks environment. Job satisfaction is an attributing factor to the employee stability and to the company’s financial success. One can hardly be surprised to find that Starbucks consistently makes the list for “Best Companies to Work for”.
Starbucks has developed the Shared Planet™ which reflects the company’s desire to conduct business in a responsible manner. The company has long-term plans to improve the company’s corporate ethics by the year 2015 focusing on ethical sourcing, environmental stewardship and community involvement. Starbucks plans to use 100% of coffee grown responsibly and ethically traded, use 100% reusable or recyclable cups and to contribute more than 1 million community hours per year. Ethical sourcing relates to Starbucks’ commitment to using the highest quality coffee that has been grown responsibly and traded fairly. The company hopes to help the future of coffee farmers and establish a more stable climate for the planet by doing business with ethical sources of coffees. Starbucks plans to use 100% coffee that is grown responsibly and ethically traded by the year 2015. Environmental stewardship relates to commitment to improving environmental footprint. Work towards using all reusable or recyclable cups by the year 2015, and to have recycling available in 100% stores. Investigating ways to reduce use of resources of water/energy. Upgrading existing stores and new stores will be built to use 25% less energy; remodeling plans incorporate recycled/renewable materials. Working toward green certifications for all new company-owned stores by the end of the year 2010.
1. Starbucks Corporate Culture<br />Katie Brindley, Michelle Grant, <br />Evangelita Nez, Ryan Scalmanini<br />and Robin Tigler<br />University of Phoenix<br />PSY428 – Organizational Psychology<br />May 18, 2009<br />
2. Introduction<br />The following topics will be discussed:<br />Diversity and Customer Focus<br />Organizational Structure<br />Networking<br />Organizational Ethics<br />Employee Relations<br />Corporate Citizenship<br />
3. Diversity and Customer Focus<br />Starbucks is not a “franchise”<br />Customer base includes all nationalities<br />Repeat customers include business professionals, healthcare professionals, students <br />Store locations are international<br />Sites include schools, malls, hospitals, airports, grocery chains<br />
4. Diversity and Customer Focus<br />Management execs regularly visit stores to ensure quality<br />Strategies are implemented to enhance benefits for customers and employees<br />Customer ownership and loyalty are key to success<br />Customer feedback regularly solicited<br />
5. Organizational Structure<br />Howard Schultz – CEO<br />Restructuring has created new positions for flatter organization:<br />Global Real Estate Design Mgr<br />Global Strategy Mgr<br />Human Resource Strategy Mgr<br />Customer Experience Mgr<br />Marketing & Brand Strategy Mgr<br />Store expeditors at all locations<br />
6. Organizational Structure<br />Flatter organizational structure will:<br />Lead to more efficient and more effective business strategy<br />Streamline information flow from customer and low-tier employee to corporate level<br />Keep customer and bottom line a priority to Starbucks business strategy<br />Utilize new employee manual to streamline production and increase employee efficiency<br />
7. Starbucks Networking<br />“My Starbucks Idea” social networking site launched in March 2008:<br />Customers play role in shaping company’s future <br />Re-ignites emotional attachment with customers <br />Builds a network of loyal and dedicated clientele <br />Allows open forum for ideas and discussion <br />Provide customers the ability to provide ideas on products and service <br />www.Mystarbucksidea.com<br />
8. Organizational Ethics<br />Supports six point mission statement <br />Mission statement is guiding principle and holds it up as a filter for decision making<br />Employee training includes review of mission statement, customer service theory and corporate culture <br />Starbucks New Partner Training Plan includes training on ethics, ergonomics, safety, legal compliance, hands-on training<br />
9. Employee Relations<br />Starbucks promotes frequent visits to store locations from regional/district mgrs<br />Encourages open employee communications <br />Starbucks values each employee as “partner”<br />Employees provided medical, vision/dental, 401k/stock options, tuition reimbursement, vacation <br />
10. Effects of Organizational Ethics and Corporate Culture<br />Employees share in “Starbucks Experience “<br />Reduction in employee turnover rate<br />20% Management<br />80% Lower tier (Avg retail turnover rate + 200%)<br />Results in more satisfied/happy employees<br />Results in value oriented ethics<br />
11. Corporate Citizenship<br />Developed the Shared Planet™:<br /> Reflects company’s desire to conduct business in responsible manner<br />Long-term plans include improving corporate ethics by 2015 by:<br />Ethical sourcing<br />Environmental stewardship <br />Community involvement. <br />Created International Youth Foundation, Give2Asia, China Education Project<br />
12. Conclusion<br />Starbucks has become the most successful company in gourmet coffee by integrating:<br />Restructuring of organization<br />Social Networking<br />Focus on Diversity and Customer Service<br />Global promotion of ethical business practices<br />Strengthening employee relations<br />Promoting corporate citizenship<br />
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