RUNNING HEAD: TEAM RESEARCH PROJECT 1 TEAM RESEARCH PROJECT 3 TEAM RESEARCH PROJECT \ Author Note This research is being submitted on June 15, 2014 to Adam Samuelson for B233/MAN2021 Section 08 Principles of Management Course. Company Introduction From the first Starbucks Café that opened in 1971, Starbucks has been “around the block” a time or two. They have had their share of obstacles to overcome from soaring coffee prices in the 1980’s when they were first started trying to expand, fierce competition, operational challenges and difficult business environments especially in international countries like Egypt and Israel, numerous labor disputes and a tumultuous economy. Navigating these obstacles, Starbucks has been significantly successful and maintains an outstanding reputation (Cameron, 2008).   Starbucks has become the number one coffee retailer of the world. It is also the largest coffeehouse in the world with more than eighteen thousand coffee shops in 60 countries and opens on average, two stores per day (Farfan, 2014).  Starbucks success has been accomplished with unconventional methods. For example, Starbucks does not use advertisement on billboards or on commercials. Instead their success is based on building enduring relationships as well as creating a “third place”. This third place is a place in-between home and work. People want to go there because it is convenient, inviting, familiar, safe, comfortable and unhurried. With thousands of stores and over a million of customers, they still focus on “one customer, one partner, one coffee at a time” (starbucks, 2014). Starbucks has gone from being around the block to being down the block. It is interesting to take a look to see how they got here and the people that have navigated their success. Howard Schultz – Biography & Introduction Starbucks’s current CEO, Howard Schultz, has been with the company since 1982 and has held various roles within the organization (Leadership Team, 2013). Before joining Starbucks, he worked for several high profile companies. He eventually became the general manager for a Swedish coffee drip manufacture by the name of Hammarplast and was responsible for their U.S. operations (Coffee King, 2010). He formed a personal interest in Starbucks, who at the time was still a small company; he was particularly curious “as to why it ordered so many plastic cone filters” from his company (Minchom, 2013). He first joined the company as director of marketing and soon after took an eye opening trip to Italy where he noticed the commonality of the coffee bars and their role as meeting places and their influence on the local culture (Coffee King, 2010). He relayed his findings to the owners and began trying to influence the direction of the company towards this model. After several unsuccessful years of doing so, he left the organization to open his own company that filled this desired role within society. After the success of his ...

1. RUNNING HEAD: TEAM RESEARCH PROJECT 1
TEAM RESEARCH PROJECT 3
TEAM RESEARCH PROJECT
Author Note
This research is being submitted on June 15, 2014 to Adam
Samuelson for B233/MAN2021 Section 08 Principles of
Management Course.
Company Introduction
From the first Starbucks Café that opened in 1971, Starbucks
has been “around the block” a time or two. They have had their
share of obstacles to overcome from soaring coffee prices in the
1980’s when they were first started trying to expand, fierce
competition, operational challenges and difficult business
environments especially in international countries like Egypt
and Israel, numerous labor disputes and a tumultuous
economy. Navigating these obstacles, Starbucks has been
significantly successful and maintains an outstanding reputation
(Cameron, 2008).
Starbucks has become the number one coffee retailer of the
world. It is also the largest coffeehouse in the world with more

2. than eighteen thousand coffee shops in 60 countries and opens
on average, two stores per day (Farfan, 2014). Starbucks
success has been accomplished with unconventional
methods. For example, Starbucks does not use advertisement on
billboards or on commercials. Instead their success is based on
building enduring relationships as well as creating a “third
place”. This third place is a place in-between home and
work. People want to go there because it is convenient, inviting,
familiar, safe, comfortable and unhurried. With thousands of
stores and over a million of customers, they still focus on “one
customer, one partner, one coffee at a time” (starbucks, 2014).
Starbucks has gone from being around the block to being down
the block. It is interesting to take a look to see how they got
here and the people that have navigated their success.
Howard Schultz – Biography & Introduction
Starbucks’s current CEO, Howard Schultz, has been with the
company since 1982 and has held various roles within the
organization (Leadership Team, 2013). Before joining
Starbucks, he worked for several high profile companies. He
eventually became the general manager for a Swedish coffee
drip manufacture by the name of Hammarplast and was
responsible for their U.S. operations (Coffee King, 2010). He
formed a personal interest in Starbucks, who at the time was
still a small company; he was particularly curious “as to why it
ordered so many plastic cone filters” from his company
(Minchom, 2013). He first joined the company as director of
marketing and soon after took an eye opening trip to Italy where
he noticed the commonality of the coffee bars and their role as
meeting places and their influence on the local culture (Coffee
King, 2010). He relayed his findings to the owners and began
trying to influence the direction of the company towards this
model. After several unsuccessful years of doing so, he left the
organization to open his own company that filled this desired
role within society. After the success of his own company and
the desire of the Starbucks ownership to pursue other
endeavors, Schultz purchased Starbucks for 3.8 million dollars

3. (Coffee King, 2010). The continued success of Starbucks has
helped make Mr. Schultz the 287th richest man in America, with
an estimated net worth of $2 billion dollars, and placed him at
#273 on the Forbes 400 list (Howard Schultz, 2014).
Management Style
Howard Schultz is the self-effacing chairman and CEO of
Starbucks. He is the mastermind of the astonishing growth of
Starbucks. He brought the coffeehouse culture of Italy to United
States. Being a maverick marketer he transformed the little four
store chain into the leading retailer of coffee in United States.
The management style of Howard Shultz is Employee based.
From his beginning at Starbucks, he has made a radical change
on how the company dealt with the employees. He believed that
friendly and efficient services by the employees would boost
sales. He instituted training programs to improve the employees
into being knowledgeable and to be employees who enjoy
working. He also provided the employees with stock-options
and comprehensive health insurance (Howard Schultz, 2014).
This attracted talent and created a trusting relationship with the
employees. The love for employees has always guided the
management style of Shultz. Despite outside pressures during
the company’s worst crisis to end the employee’s health care
benefits and the stock-options he did not sacrifice the
company’s value for financial performance and he eventually
reconciled the two. It is not common for CEO’s to have such
strong management principles and implement them against all
odds with much conviction like Howard Shultz.
Howard Shultz, unlike other leaders he is able to balance
being assertive, decisive and approachably real. This has made
him different from other iconic leaders and anyone would like
to have coffee with him. He is open and he shares his story
willingly. Shultz is forthright about his story that gives other an
ample opportunity to see his struggles. He also does not fear
creating something new of a company. He is a leader who
balances profit making and a benevolent employer. This made
him incorporate revolutionary concepts that other people vied as

4. financially unwise. This included the comprehensive health
insurance for their employees. Shultz also accepts failure, takes
the accountability and he keeps learning (Leadership Team,
2013). He is quick at owning up his missteps. As a leader,
Shultz also uses his influence to spread the idea of social
conscience by corporations to the employees and the world. His
activism made him number one business person of the year in
the fortunes list of 2011. Shultz understands that he should
inspire others. He is referred to as a self-enhancing
Managers today must have knowledge in almost all fields
including marketing, data analysis, finance, and accounting.
They are operating in a more competitive environment with less
time between one decision and the next. Companies are also
operating globally, which means each decision carries great
significance. Fortunately, they have more data than managers
had two decades ago. The expansive knowledge that managers
are expected to have today is supposed to help them make sense
of the information provided for making decisions (Yang, 2007).
Another significant change in management practice has been the
move to see organizations as systems whereby inputs undergo
processing to become outputs. This has led to greater
collaboration between departments within organizations to save
costs and improve quality. Starbucks for instance has improved
the relationship with its suppliers, with a view of making them
part of the value chain. Suppliers are informed of the
expectations of customers and are therefore able to adjust their
supplies to suit the needs of customers (Yang, 2007). The
company is also moving to produce its own coffee to create
independence from suppliers.
Lastly, the interviewee noted that managers at the company
today are concerned about how customers view the company.
With technology, customers are now more powerful and can air
their views about the company quite easily. As such, the
company uses social sites and its website to answer customers’
questions and address their concerns (Yang, 2007).
Leadership Style

5. Leadership is one of the major four functions of management.
Anyone can have the title of being a leader or a manager, but
not everyone can demonstrate it effectively. A leader is put into
place to help develop and maintain the standards and core
values of a company. They are to lead by example, quality,
excellence and perseverance with the goal to achieve the highest
success as possible. Starbucks is a company that has over
18,000 stores in 62 countries. This company demonstrates
servant leadership and goes beyond the needs of its customers
to the needs of the community. (Starbucks Leadership Style,
2013).
The Starbucks Foundation awarded nearly 100 Youth
Leadership grants to young aspiring teens by investing and
developing their skills to become extraordinary leaders. The
senior executive, Howard Behar, has always been a firm
believer in establishing the Starbucks culture, which expresses
the importance of "people over profits." He has coached over
hundreds of leaders and revealed ten principles that help guides
his leadership. The C.E.O himself, Howard Schultz, actually
received the 2013 Kellogg Award for Distinguished Leadership.
This demonstrates the trickle-down effect from the executive to
the employees how meaningful and serious leadership is taken
within the company.
Personal Interview:
I located a personal, 26-minute interview with the C.E.O
himself that touched on a variety of different subjects such as
organizational structure, ethical sourcing, CSR, leadership, and
ethic. In this interview by Karen Davila, he was asked to give
five tips on how a person could become a successful
entrepreneur. Entrepreneurs are usually innovative leaders who
are not afraid to take risks. They feel they have something to
"offer" that maybe unique from the average. His five tips were:
1. Dream and then dream bigger
2. Things cost and take longer than expected so you must raise
money
3. Surround yourself with people who are like-minded

6. 4. Share your success
5. You will need luck
He was also asked what was one his biggest fears? Schultz
stated that failure was one of his biggest fears. He also
mentioned the lack of leadership as a concern in the industry.
When Starbucks took a fall when he stepped down, he came
back and reminded his workers of the tradition that Starbucks
was all about. Mr. Schultz also stated in another interview that,
"Leadership is not always having the answers, but leadership is
staying truthful and authentic.”
References
Cameron, L. (2008, December 1). Top Challenges Facing
Starbucks. Retrieved from
http://lindsayecameron.wordpress.com/2008/12/01/top-
challenges-facing-starbucks/
Coffee King. (2010, August 5). Retrieved June 2, 2014, from
http://www.mirror.co.uk/news/uk-news/starbucks-howard-
schultz-on-how-he-became-239790
Farfan, B. (2014, May 12). 2012 World's Largest U.S. Retail
Companies - Biggest American Retail Chains. Retrieved
from http://retailindustry.about.com/bio/Barbara-Farfan-
46182.htm
Howard Schultz. (2014, June 2). Retrieved June 2, 2014, from
http://www.forbes.com/profile/howard-schultz/
Leadership Team. (2013, May 20). Retrieved June 2, 2014, from
http://news.starbucks.com/news/kellogg-school-of-management-

7. students-honor-starbucks-howard-schultz-with-d
Minchom, C. (2013, August 29). Starbucks Growth Strategy.
Retrieved June 2, 2014, from
http://jewishbusinessnews.com/2013/08/29/howard-schultz-
starbucks-growth-strategy-in-action/
Smith, D. P. (2013, May 24). News and Events-Taking things
personal [Newsgroup post]. Retrieved from
starbucks. (2014). Retrieved
from http://www.starbucks.com/about-us/company-information
Schultz, H. (2013, April 22). Starbucks - Up Close and Personal
with Howard Schultz. (K. Davila, Interviewer)
Starbucks Leadership Style [Blog post]. (2013, July 6).
Retrieved from Psych 485 Blog
Starbucks Youth Leadership Grants. (n.d.). Retrieved May 30,
2014, from Institute of Applied