Successful Application of Organizational Behavior: Starbucks

Organizational theory and behavior are a vital part of any organization and can be a critical area that determines an organizations success in any industry. If and how these concepts are uniquely applied, organizations can define many different areas of their organizational structure. The Starbucks Corporation has become a well-known globally successful company. In analyzing the application of the organizational behaviors of communication, culture, and decision making, we can determine how these concepts have made this corporation successful.

Organizational Communication

Communication in the Starbucks organization is exceptionally successful. In order to appear transparent as an organization, provide sound direction of communication, maintain solid channels of communication, and still the rumor-mill; Starbucks has taken immense strides in concentrating on this aspect of its organizational behavior.

Although Starbucks goes to no great lengths to define or list their organizational structure (Hawks, Kembell, Kembell, Olsen, & Perry, 2002), Recent changes in the organization define the organization as a matrix structure (Shultz, 2008). These changes in the organization, done to improve the customer experience, helped define the communication directions used by the organization.

George and Jones (2005), state that the matrix organizational structure is a very effective way to take full advantage of all communication channels. Whether the organization wishes to label the organizational structure or not, the structure is the pivotal point of success in its organizational communication. The matrix structure, defined by Business Reference (2007), is made up of cross functional work teams that have the ability to report to heads of the organization other than the primary supervisor. This structural behavior has allowed the corporation to have successful communication upward, downward, and laterally with its employees.

Maintaining effective communication, Starbucks uses a model of communication used generally by smaller group networks, all channel communication. All channel communication allows employees to communicate actively with each other, making all members free to contribute (Robbins, 2005). Surely, this channel of communication has contributed to the success of the organization.

The organizational communication extends beyond just the employee and to the customer as well. Starbucks does a great job in using technology, marketing tactics, and their employees to communicate success, goals, and vision to the customer. Examples of this can be seen on the Starbucks website. The website shares the companies guiding principles, vision as a company, social responsibility, and mission statements.

What this has done is allowed the organization to maintain a transparent image. This has helped to still rumors about the organization as these rumors come about. Starbucks has no problem rolling out a time table for important decisions to employees and the public as important decisions that come about. The organization will post on the corporate website and issue press releases that explain decisions and behavior that could cause uncertainty. Starbucks does a great job of illustrating pros and cons of future and current decisions. A good example of this can be seen in a recent posting of the structural changes the organization made in order to maintain stability and continue excellent customer service (Shultz, 2008). This posting, aimed to head off uncertainty and quall the rumor-mill, explains to all partners of the organization (employees) that necessary changes will be made in the organizational structure including consolidation, reorganization, and a stated number of necessary layoffs (Shultz, 2008). These styles of communication will continue to allow the organization to have success in their industry.

Organizational Culture

The Starbucks Corporation presents a strong appeal for potential employees with a strong organizational culture. This culture maintains values that reach every corner of its organization; and reaches outside its walls to the communities as well. Reviewing some of Starbucks' cultural characteristics reveals how successful and appealing this cultural model can be.

Starbucks appeal

Many of the business concepts and the attributes of the Starbucks' organizational culture are very appealing. First, Starbucks has become a well known global entity. This has been achieved by a well recognized product that relies on its quality and unique marketing strategies. Customers can always be expected to be confronted with enthusiastic employees, happy to serve, and focused on the needs presented by their customers. Employees are well trained and have a vast amount of knowledge about all the products offered by their company. The effort that is placed on the quality of their product can be seen by the average consumer. They strive to provide an excellent product and, as proven by their tremendous success, few patrons leave the store with any dissatisfaction. It is apparent that the values and mission statements projected by the company are having great success in creating a strong cultural behavior.

Values

Many of the values held by the Starbucks Corporation business model are shared by consumers and adapted by closely watching organizations. One value that stands out for the company is in community support. According to Starbucks Corporation (2008), they support many community organizations such as Conservation International, The Earthwatch Institute, Save the Children, Mercy Corps, the African Wildlife Foundation, and Planet Green. Values such as this have set standards and send messages that profitable companies have a responsibility to the communities that support their organization and to the needs impacting the environment and the world surrounding them. As well, the Starbucks organization list in its guiding principles the importance of embracing diversity, providing a positive work environment through respect and dignity, and a commitment to satisfying all customers all the time (Starbucks Corporation).

Embodiment of cultural characteristics

Starbucks continues to satisfy employment needs and provide excellent customer service. In part, this success can be attributed to the cultural characteristic of innovation and risk taking. At Starbucks, employees are empowered and encouraged to think outside the box. Hawks, Kembell, Kembell, Olsen, and Perry (2002), tell us that Starbucks encourages and rewards employees for innovative ideas and encourages employees to sway from drink standards to meet the specific request of the consumer.

This leads to the characteristic of attention to detail. Because the company promotes the enthusiastic development and satisfaction of its customers, employees are expected to remain focused on the needs of the customer. In this business, this may mean the development and use of special listening skills and multitasking abilities. Employees, focused on the ever-changing ingredient orders that very from customer to customer, show how valuable this characteristic is to the corporation.

The Starbucks Corporation also exhibits the cultural characteristics of people orientation and team orientation. The company shows employees how important they are to their organization through the decisions they make that impact different members. Some of this can be displayed through the offering of health benefits to part-time employees (Hawks et al., 2002).

Cultural strength

Starbucks maintains a very strong spiritual culture. Marques (2008), states that "Starbucks' performance toward suppliers, communities, employees and customers gives rise to the awareness that Starbucks is one of those corporations that does not explicitly use the term spirituality at work for their actions, nonetheless live it to the fullest." Starbucks shows this spiritual culture in their promotion of fair trade, environmental contributions, workplace diversity, and its self acclaimed statement of employee enlightened self-interest. The bonds that Starbucks' forms with its partners, employees, and community are evident when one simply opens the front door of the establishment.

Starbucks maintains a strong appeal for a great place to work by asserting its strengths in its acquired cultural characteristics, values, and spiritual culture. Many other organizations are adapting these structural concepts after seeing the success of this organization. Starbucks can maintain this strong organizational culture with continuing dedication to its employees and customers. Starbucks has achieved success in corporate culture and has set the bar high. For many organizations this should be a walk-up call to catch up.

Decision Making

Perception is a process that all people take part in as we move through the course of events in our daily lives. When we meet people, make business decisions, evaluate performances, or pass judgments, our perception surrounding such events help persuade our next course of direction (Goldstein, 2006). In a sense, perception, accurate or flawed, is our reality. Causes that shape or distort our perceptions have a tremendous effect on the impact of an organization's behavior. Individuals, by nature, develop perceptive shortcuts when passing judgment and inflect both positive and negative effects. Starbucks has realized this importance in the decision making process of its organization and has been successful in modeling guidelines to direct employee behavior and shape corporate perception to aid in its success.

Because Starbucks understands that decisions can be based on perceptions of individuals, influenced by upbringing, beliefs, or current state of mind; models are developed to guide individuals through the process. The creation of these models creates a standard that is followed to deliver a satisfactory result. These models Identify a need, create a process to determine what qualifications will satisfy the need, Identify matches to the need, then a decision is made on what match best suites the need. These models are not a perfect solution to the decision making process. Errors and bias still creep in to this process through the use of intuition, gut feelings, experience, and impulse (Robbins, 2005).

In addition, these models try to shape moral and ethical decisions, these models of ethical and moral perceptions 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 list 6 points to this framework to guide and model decision making behavior:

1) Identify the ethical problem.

2) List possible solutions (what could you do?) and any obstacles to resolving the problem.

3) Seek input from others, if appropriate.

4) Determine the best approach (what should you do?).

Is it consistent with our Guiding Principles, the Standards of Business Conduct and any applicable law or regulation?

Would your approach embarrass you or Starbucks?

How would your approach look published in the newspaper?

Would you be comfortable with the example it sets for future decisions?

5) If the path isn't clear, ask for guidance.

6) Follow through on your decision.

In addition to providing these framework guidelines 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 isn't right, you can speak up and share your concerns knowing that Starbucks wants to hear them and does not tolerate retaliation against partners. (Starbucks Corporation, 2008)

The corporation uses developed guiding principles and mission statements to guide in the decision making process and these also appear publicly on their website. These models play a vital role in the decision making process. Starbucks has been very successful in its ability to circumvent perceptive errors through the use of relational models. However, even with the use of relational models, errors and bias can still play a role in the decision making process, but the organization has adapted a level of accountability through this process to minimize the impact of errors and bias.

Communication, culture, and decision making, represent only a small part of the concepts that makeup organizational theory and behavior. A corporation that applies the concepts of organizational theory and behavior can determine the success of any organization. As we can see, Starbucks has concentrated on the successful application of these three areas of organizational behavior. With this successful application, Starbucks proudly promotes and shares the models that make them successful to anyone who cares to investigate. As a result, Starbucks continues to be a successful corporation.

References:

Business Reference. (2007). Matrix Management and Structure. Retrieved October 24, 2008, from http://www.referenceforbusiness.com/encyclopedia/Man-Mix/Matrix-Management-and-Structure.html

George, J., & Jones, G. (2005). Understanding and Managing Organizational Behavior (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Goldstien, E. B. (2006). Sensation and Perception (7th ed.). New York: Wadsworth.

Hawks, M., Kembell, B., Kembell, S., Olsen, L., & Perry, L. (2002). Catching the Starbucks Fever. Retrieved October 17, 2008, from http://www.academicmind.com/unpublishedpapers/business/marketing/2002-04-000aag-catching-the-starbucks-fever.html

Marques, J. F. (2008). Spiritual performance from an organizational perspective: the Starbucks way. In Corporate Governance (Vol. 8, pp. 248-257). : Emerald Group Publishing Limited. ProQuest Database.

Robbins, S. P. (2005). Organizational Behavior (11th ed.). Upper Saddle River, NJ: Pearson Education.

Shultz, H. (2008). Starbucks Makes Organizational Changes to Enhance Customer Experience. Retrieved October 22, 2008, from http://www.starbucks.com/aboutus/pressdesc.asp?id=831

Starbucks Corporation. (2008). Corporate Social Responsibility. Retrieved October 15, 2008, from http://www.starbucks.com/aboutus/csr.asp