Starbucks Organizational Structure free essay sample

One year later, while in Italy, he became fascinated and inspired by the Italian coffee bars. He thought that there was certain romanticism that the unique shops offered. So in August 1987, Howard Schultz took a gamble and purchased Starbucks. His vision was born. The goal of Starbucks was to offer the consumer a premium coffee and to create a unique experience for patrons The Starbuck mission is simple, â€Å"To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time† (Starbucks, 2011). They undoubtedly have delivered that mission. Today Starbucks has become the leading specialty coffee retailer in the world. Located in 50 nations, Starbucks have in excess of 15,000stores (Starbucks, 2011). Howard Schultz, President, Starbucks Corporation When considering the organizational structure for his new corporation, Schultz had four basic organizational functions he could have chosen. These organizational functions are referred to as: functional, divisional, network, and matrix organizations. A functional organization is structured based on skills required and business functions. The functional organization structure is mainly centered on departments or functions within the organization. In a functional group, a clear chain of command is apparent. Employees which within functional divisions typically have a task to perform and those employees perform those tasks such as a marketing department. In this structure, the marketing department would be staffed with marketing employees. Within the functional organization, it is thought that efficiencies occur within a group of individuals working on a similar product or service. The downside is that this can create individual silo’s that does not promote creativity and varying inputs and opinions. An organization that produces standardized goods and services is well suited to perform in a functional organization because of unique and specialized components of the business. This function also serves well when there are limited products produced and those productions are predictable. Mr. Schultz more than likely also considered the divisional organizational structure. Divisional organizations typically group people based on the products they produce, specific locations and the customers they deal with. In this structure, an organization uses functional groupings to enable employees to interact and correspond effectively with one another. This process permits clear communication and teamwork which, in turn, leads to good service for its customers. Mr. Schultz; however, successfully created a matrix structure in alignment with Starbucks strategy. Starbuck has no formal organization chart of main departments, functional department consists of marketing, supply chain, operations, finance and human resources, and cross functional teams, consisting of local store marketing and marketing campaigns. The decision-making process in Starbucks is bottom – up process, which the employees are empowered even to take decisions of their own accord. This organizational structure combines product-based divisions and functional-based divisions. This requires employees to report to two managers or leaders. The matrix organization structure is an open gateway to communication. The matrix structure is composed of cross functional teams. They are empowered to communicate with heads of the organization as well as his or her supervisor. This structure enables employees to communicate laterally, upward, and downward. This structure has been touted as one of the reasons Starbucks has been so successful in today’s challenging workplace. Not only does this structure allow for clear and open communication, its design tends to create a team spirit of belonging and empowerment. The employees are collaborating with others and in turn, are developing his or her personal skills. Had Mr. Schultz used a strictly functional organization or divisional organization, the lines of communication would have been stifled. Starbucks has used technology, marketing tactics and employees to communicate success, goals, and vision to the customers (Tinity, 2010). Starbucks prides itself on clear and open communication with its customers as well as its employees. When viewing Starbucks website, examples of the transparency are prominent. The Starbucks website offers the viewer a look into the vision of the company, its guiding principles, mission statements and social responsibility. Links are available that allow an interested party the opportunity to read e-mails from the owner to the employees. This insight allows their customers the ability to feel as though they are part of the inner-workings of the organization. By sharing this intimate information, Starbucks is creating a virtual open dialog between its customers and itself. This helps to shield speculation by the press and its customers and minimize rumors. The Starbucks culture is in complete alignment with the Matrix structure. At Starbucks, open mindedness, communication and transparency are key components to their culture. Starbucks uses less than traditional forms of marketing. Starbucks does not rely on standard advertising methods such as print, radio, and television; instead it is brand image that continues to bring customers back. A customer holding a Starbuck cup portrays an image and an air of quality that results in excellent advertising for the company. Additionally, when entering a Starbucks, a form of sensory marketing occurs. The smell, the ambiance, the experience conjures up positive feelings and emotions. Starbucks has been recognized by Fortune Magazine as one of the 100 best companies to work for. The values that Starbucks holds are known throughout the world. Finding, training, and retaining employees are the core to their success. They recognize that training is imperative to those employees which choose Starbucks. All employees are offered full benefits ncluding part time associates. Starbucks human resources department effectively communicates with their employees. Being open and honest to share any issues he or she may have in the workplace is highly encouraged of Starbuck Employees. In addition, these models try to shape moral and ethical decisions, these models of ethical and moral perceptio ns focus on rights of the individual and social justice. Standing on the platform of transparency, Starbucks post these models of decision making behavior based on what they call the Ethical Decision Making Framework on their website (Starbucks Corporation, 2008). Starbucks makes these statements very clear to each employee: * You are empowered— you can deliver great customer experiences, knowing that Starbucks supports you in doing the right thing and conducting business with integrity. * You have responsibility — you play a critical role in ensuring that Starbucks is a great work environment and in protecting our culture, our reputation and our brand. * You have help — if you are unsure what to do in a situation; you have resources available to you, including the Standards of Business Conduct and the Business Conduct Helpline. You have a voice — when you believe something isnt right, you can speak up and share your concerns knowing that Starbucks wants to hear them and does not tolerate retaliation against partners (Starbucks. com). Starbucks has successfully enacted the matrix operational functions. It can be seen throughout its structure, service, marketing, and departmentalization. Clearly, the matrix structure is the only flexible structure that enables Starbucks to achieve the goals they set forth that have made them a market leader. These goals include: clear communication, transparency, and uniqueness. Starbucks will continue to grow exponentially through the matrix system without finding themselves stifled by the constraints of other operational structures. References Starbucks Corporation,. (2008). Ideas in action. My starbucks idea. Retrieved June 11, 2011 from http://blogs. starbucks. com/blogs/customer/default. aspx Starbucks Food, Starbucks website, Starbucks Corporation,   (2011). Retrieved June 11, 2011, from http://www. starbucks. com. Tinity, A. M. (2010). Associated Content. 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