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 noticing. Starbucks was missing its aura, its spirit and need to find back its soul as the company had when it started in the US. The same thing could happen to other organizations. 2. The type of radical change used by CEO Howard Schulz to bring back the corporate culture of Starbucks back to what it was has been relatively easy for Starbucks to implement.
This is due to the following reasons. As Starbucks expanded, the look of the stores in the US were simply copied and used for the stores located in other countries. The same colors, setting of tables and chairs, the counter, the mugs, the cakes, sandwiches etc. was used in all the other stores. Customers get this same Starbucks experience everywhere they found themselves. The baristas working for Starbucks all know what the ingredients of the variety of coffees and lattes are and how to approach the customers in whatever country these baristas work. So, this makes it easier for Starbucks to just use a single afternoon for all the stores to have training on how to let the customers feel the true Starbucks experience. For this case of Starbucks you could speak of radical change in a way that it is radical because the change have been implemented in 7,000 stores all over the world. As the change was merely to train the baristas in order to let the customers feel the true Starbucks experience and to replace the espresso machines that blocked the interaction between the customer and baristas. 3. In this particular case of Starbucks the change that has been implemented was planned change.
Howard Schulz addressed this change as an intentional, goal-oriented activity just how change has been discussed in this chapter. Howard Schulz its primary mission was quality control, its goal for the change was the baristas to be trained in order to give the customers that value the quality Starbucks offers the true Starbucks experience. This connects to this chapter as the goal of planned change is to change employee behavior. Furthermore, this chapter talks about ‘change agents’ who are responsible for managing change activities. Howard Schulz is this change agent and acted as an idea champion. Idea champions are defined as people who actively and enthusiastically promote the change and build support, overcome resistance, and ensure it is implemented. Furthermore, these idea champions are willing to take risks and feel confident about the whole change situation. Howard Schulz was willing to take the risk to close all 7,000 stores for one afternoon in order to implement the change in each of the stores. He was confident about the change to succeed in this one afternoon and it did. The change of bringing back the culture to its roots of a neighborhood coffee shop entranced with the romance of coffee has saved the company.
4. Starbucks values quality over speed and is avoiding the feeling of mass production. For Starbucks baristas the quality is provided by pouring every glass of espresso like honey from a spoon and they do not make several drinks at once but are now in favor of slowly making each drink for each customer. A company that also values customization and high levels of customer service but emphasizes on speed and efficiency, needs a change initiative that differs from the one discussed in the Starbucks case in the following ways. Since the emphasis is on speed, the employees in the company (restaurant, coffee shop, bakery shop) need to be trained to handle each customer quickly without looking hasty and making mistakes because of speeding up certain things. The cues should be short as customers visiting these restaurants or coffee shops value the fact that their orders are handled quickly and that they can enjoy their coffee or meal in a short time. A good initiative would be a second espresso machine so that more drinks could be made at once which raises efficiency. The same change initiative could be suitable for other companies, however, the major thing that needs to be changed in this change initiative is the training that is given to the employees.
