Case Starbucks Returns to its Roots
Organizational Behavior and Development
Case Study
Starbucks Returns to Its Roots
Submission date: 9-12-2013
1. Whenever a company grows that rapidly as Starbucks did, from starting with 11 stores in 1987 to 7,000 stores nowadays, a lot of factors change. First of all, a major factor that changes when a company grows that rapidly is the organizational structure of the company. This can be especially true when the organization begins to expand to other geographic regions and the structure of the organization is spread out over many miles (as in the case of Starbucks). A company may start out small, but, as time goes by, more employees may be hired, necessitating the introduction of departmental managers to help create a managerial structure. Additionally, an executive team may be required to run the various aspects of the business, and there may be the need for middle managers who would report to the managers. What could describe the above is; decentralization. Now, department managers and middle managers will be necessary as it is impossible for top management to oversee all the stores. Top management need to delegate some of its responsibilities and decision-making authority to others. As more stores are located, the assets will grow and need to be financed. This can be done by either debt or equity financing in which any company needs to decide its appropriate approach.
Starbucks started as a domestic US coffee shop and began to expand this to other countries. It could have been possible that they found out that the American culture of coffee in place did not adequately fit the host country’s culture. On the other hand, cultural forces in franchise stores might have resulted in a more general culture for Starbucks overall. So, the original culture of Starbucks might disappear as managers were confused whether to act upon the old approaches to pursuit this original culture or new approaches. This is what CEO Howard Schultz was
Case Study
Starbucks Returns to Its Roots
Submission date: 9-12-2013
1. Whenever a company grows that rapidly as Starbucks did, from starting with 11 stores in 1987 to 7,000 stores nowadays, a lot of factors change. First of all, a major factor that changes when a company grows that rapidly is the organizational structure of the company. This can be especially true when the organization begins to expand to other geographic regions and the structure of the organization is spread out over many miles (as in the case of Starbucks). A company may start out small, but, as time goes by, more employees may be hired, necessitating the introduction of departmental managers to help create a managerial structure. Additionally, an executive team may be required to run the various aspects of the business, and there may be the need for middle managers who would report to the managers. What could describe the above is; decentralization. Now, department managers and middle managers will be necessary as it is impossible for top management to oversee all the stores. Top management need to delegate some of its responsibilities and decision-making authority to others. As more stores are located, the assets will grow and need to be financed. This can be done by either debt or equity financing in which any company needs to decide its appropriate approach.
Starbucks started as a domestic US coffee shop and began to expand this to other countries. It could have been possible that they found out that the American culture of coffee in place did not adequately fit the host country’s culture. On the other hand, cultural forces in franchise stores might have resulted in a more general culture for Starbucks overall. So, the original culture of Starbucks might disappear as managers were confused whether to act upon the old approaches to pursuit this original culture or new approaches. This is what CEO Howard Schultz was
References: Book Robbins, S.P., & Judge, T.A. (2013). Organizational Behavior (15th ed.). Harlow: Pearson Education Limited. Website Small Business. Advantages & disadvantages when companies decentralize. Retrieved December 5 from: http://smallbusiness.chron.com/advantages-disadvantages-companies-decentralize-11938.html Small Business. What impacts organizational structure? Retrieved December 5 from: http://smallbusiness.chron.com/impacts-organizational-structure-75.html