Starbucks' Culture and Howard Schultz's Leadership | Free Essay Example

Starbucks’ Culture and Howard Schultz’s Leadership

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Topic: Business & Economics
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Introduction

Organizational behavior and theory are very important aspects of any company and are critical in shaping organizational success (Robbins & Judge 2009, p. 4). In addition, the behavior and theories contribute to industrial development depending on their application. Notably, the structure, style and kind of leaders in the organization differentiate it from the others (Robbins & Judge 2009, p. 11).

Moreover, practical and visionary leadership is a recipe for organizational success and company stability. Therefore, in this essay, the analysis is about a leader in a well-known organization. The analysis employs relevant concepts, models and theories in describing the leader. It also considers how effective this person’s leadership is, and the reasons for considering his management style as effectual. In short, the essay is a typical application of the contingency theories of leadership on the management practices, of the selected person.

Overview of the Organisation

For this analysis, the organization chosen was Starbucks Corporation. Owing to its position as one of the global successful companies, more could be desired on establishing the cause of its success, leadership styles and structures (Arthur & Gamble 1997, p. 24). Of most important is the specific leader or leaders who worked hard to make the corporation successful as will be analyzed in the subsequent sections.

In the organization, decision making, culture and communication are prioritized as the key pillars of success and the leaders must, at all times, promote integrity in the organization (Arthur & Gamble 1997, p. 26). Success at Starbucks Corporation is directly attributed to efficient communication and practical leadership. This has created transparency in the organization because the communication channels are sound and solid (Arthur & Gamble 1997, p. 29).

Industry

The company falls under the hot drink industry that comprises of all coffee drinkers and tea outlets worldwide (Starbucks Corporation 2012, p. 1). This industry encompasses hot beverages, rich-brewed coffee and cold blends among others. Mostly, the coffee and tea drinks dominate this industry globally with premium qualities for different categories of customers. As the customer demands increased, the company also made changes in its administrative strategies thus increased its relevance (Arthur & Gamble 1997, p. 33).

Location

The headquarters of Starbucks Corporation is located at 2401 Utah Avenue South Seattle, in the United States (Arthur &Gamble 1997, p. 3). However, as a multinational corporation, it has several branches in other countries.

Size

In Starbucks, most of their stores are between 1,000 and 1,500 square feet, large enough to accommodate most of their facilities (Arthur &Gamble 1997, p. 3). Noting that the roasting plant requires a lot of space, the company has to acquire enough space for effected operation.

Age

The company was started in 1971, meaning that it is 41 years (Arthur &Gamble 1997, p. 3). With this long existence, the company has created a stable base to manufacture quality products to serve the interest of the customers.

The Person Identified

The leader identified for this study was Howard Schultz who was the chairman, Chief Executive Officer and President of Starbucks Company. This leader was chosen because he transformed the organization under different situations by adopting practical leadership styles throughout (SeaZone 2009, p. 1). Since the organization offers consumable goods, managing it might not be an easy task because consumer preferences normally change, necessitating prompt action from the management (SeaZone 2009, p. 1).

According to organizational theory, a non-situational leader may not run a company whose operations are vulnerable to market dynamics (Robbins & Judge 2009, p. 14). Often, the market variations may lead to the dissolution of the business as the business could be rendered irrelevant. The moment that the company cannot respond to the market dynamics and find a workable solution for the problem, it cannot survive the competitive local and international market (Robbins & Judge 2009, p. 15).

Things Which Make the Person a Leader

Howard Schultz was a great leader for his innovative leadership styles, which he provided at Starbuck Company. When Howard joined the company, he immediately understood the business environment and engaged the management into the conversation to take care of the issue (Arthur & Gamble 1997, p. 35). In fact, other than finding appropriate products and roasting coffee of higher quality, the company under Howard’s management initiated a coordinated effort with other players. This enabled them to learn from one another, the best practices, which would create stability in the company and industry (Arthur & Gamble 1997, p. 37).

A careful analysis of the organization unveils that the employees normally revolt was a sign of relief, and against the oppression. One notes that the organization’s manager gave a detailed explanation of the management’s perception of the symbolic administration. Using symbolism, the manager might portray the anti-Calvinist tradition. Furthermore, the employee might perceive the manager as a reprobate, thus influence characterization in the organization.

As well, he claimed that the employees’ victimization of the managers was itself reprobation. Here, the evidence that the manager used in creating behaviours, seemed to portray the implicitly of the cosmic evil in its hopeless form in the organization. Under this concept, he revisited his traditional opposition to Calvinism. Indeed, the manager has to be decisive in making his sophisticated remarks about the company management that subsidiary to thematic aspects of the organization. Indeed, it sounds extra-ordinary and an over-exaggeration of human nature.

As a practical leader, Howard led the team of managers to make extraordinary coffee that could appeal to users. At the time he joined the company, it had only four stores and after a progressive and innovative leadership, he elevated the organization to where it is currently (Arthur & Gamble 1997, p. 44). Indeed, the leadership structure that Howard implemented was successful in promoting development in the company. Furthermore, he practiced more of contingency leadership theories in carrying out his managerial duties as the only way to make sure that the company achieved its main objectives (Arthur & Gamble 1997, p. 45).

As well, Howard’s trip to Italy in 1983 was one of the helped him to assesses the country’s coffee bars for quality (Arthur & Gamble 1997, p. 49). He noted the romance and flavoring experience with the kind of coffee that was made in the bars. The leader then made efforts to revive the traditional Italian exemplary coffeehouse to his hometown (Seattle), in a creative manner (Arthur & Gamble 1997, p. 54). In this regard, he created a relaxed environment that would serve the public after they have completed the day’s duties. Typically, that was a unique environment between the workplace and home, where the customers would stop-over for a cup of coffee before either proceeding to the workstation or on their way back home (Arthur & Gamble 1997, p. 60). The company operations were directed to respond to the different customer needs under different situations thus called for situational leadership that Howard effectively offered (Arthur & Gamble 1997, p. 61).

Notably, such aspects are preferably used in organizations telling for their humorous appeal to the audience. The interpretation of the organizational theories continues to elicit mixed reactions about his artistic nature, though he rejected this mantle. However, the organization is ultimately transformative, evocative and fantastically playful. The manager seems to use Ishmael to depict the conflicting context under which the organization is set. This became apparent in the manager’s remark when he wants, possibly a famous invocation that many organizations would use in attracting the audience or readers.

From the beginning of the organization, one notices a magnified and transformed work of an artist whose creativity was relatively inspiring. Though fascinating, the approach was used in the organization to depict an unusual setting as many organizations would do their work. Indeed, the managers’ creativity made the organization reasonably interesting and educative.

Effectiveness of the Person’s Leadership

Howard Schultz is considered as one of the most effective and successful boss during his term leadership at Starbucks Corporation (SeaZone 2009, p. 1). For various reasons, the leader Schultz was viewed as a courageous person and one with a compassionate heart. In essence, courage and compassion are some of the qualities, which made him famous and most successful in his duties (Antonakis, Cianciolo & Sternberg 2004, p. 17).

Through his leadership, the adoption of such qualities made the organization improve on quality and customer experience regarding the products (SeaZone 2009, p. 1). In addition, the leader helped the organization formulate communication direction or channels, which aid decision making. Moreover, this was a practical approach to ascertaining success in the corporation. The leader could also not relent on the effort to make sure that the organization structure was appropriate for its products and customers (SeaZone 2009, p. 1).

The organizational behaviors are inspiring as they keenly look at human true nature. Ultimately, managers sought the same and a number of human aspects during their lifetime. In the organization, managers portrayed human nature as a series of connections, which include things such as prejudice, religious affiliations, and cultural attributes. Notably, the characteristics are willful and strong as depicted by the sea currents and Monstrous nature of the organization. This is also compared to the manager’s role that is core in the development of the organization. The author presented the Monstrous nature of human aspects through stages in the whole organization to create a distinct scenario.

Using theoretical models of leadership, Howard Schultz’s management was characterized by personal ambitions and drive to steer the corporation to a higher level. Often, leadership theories provide a conceptual understanding, concerning the leader (Antonakis, Cianciolo & Sternberg 2004, p. 20). In this case, the contingency theories are used in studying Schultz’s leadership. Here, the model defines a leader according to the situation he/she faces. This means, the style of leadership is examined according to the leader’s approach to a particular situation, whether in handling difficult situations or operating under normal circumstances. Basically, a change in the situational condition would alter the leadership style (Antonakis, Cianciolo & Sternberg 2004, p. 17).

According to Fielder’s Contingency Theory, the leader’s style of management, performance and orientation are correlated, but show discrepancy under dissimilar situations (Robbins & Judge 2009, p. 77). For the effectual conclusion on the leader’s effectiveness, issues of task orientation and structure, situational element and his/her position in the organization determine the overall performance. Based on this theoretical provision, Howard Schultz’s orientation proved very effective and productive as the working situation altered from very low, progressing to medium finally to the highest control (Stallard 2011, p. 1). In reality, the leader showed a commitment to solving the corporation’s vulnerability during this growth period. There are leaders who show effectiveness during the initial development of the company, but later fail to manage the organization as it grows complex (Stallard 2011, p. 1).

When Howard Schultz joined the company, the structure was not complex and the leader was able to restructure the organization, open more branches and still could manage it effectively. Apparently, his management skills, interest and corporation with the entire company management led to the success of the strategies (Robbins & Judge 2009, p. 78). The chart below gives clarity on contingency theory as the organization moves from low control, gradually to high control.

Summary of Contingency Theory
Chart 1: Summary of Contingency Theory

Situation Analysis

For this study, the contingency models of leadership used, outline the situational elements and leadership orientation. Howard displayed effectiveness on the two aspects and drove the company to successful heights (SeaZone 2009, p. 1). In an application, the situational elements and leadership orientation of Howard Schultz could be analyzed as below.

Situational Elements

Leader-member relations

The relations between leaders and members of the managerial team. Notably, such relations increase the leader’s influence on the team so that he/she could tackle the rising conditions in the company (Cole 2003, p. 84). Using this element, Howard developed a cordial relationship with members of the management team, who in turn accepted his opinion regarding the expansion and developmental initiative in the company (Stallard 2011, p. 1). This acceptance created a favorable situation for the formulation and articulation of the company policies.

Task Structure

Notably, the structure under which the company carried out its duties was well-developed and solution-oriented (Cole 2003, p. 85). Since poor performance results from unstructured systems, Schultz made sure that the company structures aided decision making, task accomplishment and conflict resolution. This made the leader very successful in carrying out his managerial duties.

Position of Power

The leader’s position in the company determines his/her abilities to conduct certain duties and exercise authority with minimal obstacle. As postulated in the contingency theory, the leader can punish or reward considered defiant or hardworking respectively (Cole 2003, p. 84). As the company’s CEO, he was at the helm of leadership and could fire or reward employees appropriately. Regarding the position power, he applied the leadership continuum model in his management task (Antonakis, Cianciolo & Sternberg 2004, p. 48). Notably, the leadership continuum is that, which form as a result of the relationship originating from the boss down to the subordinates depending on the situation (Antonakis, Cianciolo & Sternberg 2004, p. 51). Under this model, he used this position to streamline the company operations, which led to remarkable success.

Based on the characteristics of the leadership continuum model, the leader takes into account the three major variables, including the boss, subordinates and the situation of implementing the leadership strategies (Antonakis, Cianciolo & Sternberg 2004, p. 54). Howard Schultz applied the variables to make his leadership successful.

Boss: this is the overall decision-maker in the company and must be qualified, experienced to manage the workers and the entire production system. Regarding the leader in question, he successfully used his status of the coordinate the company activities and manage effectively his subordinates (Stallard 2011, p. 1).

Subordinates

These are the people working under the CEO’s direct authority. They carry out day-to-day activities. Therefore, Schultz used his position effectively by working with the subordinates to make sure that the company’s production system becomes sustainable (Stallard 2011, p. 1).

Situation

Depending on the situation, the leadership style could be changed to suit the prevailing environmental conditions. In this regard, Howard used environmental considerations including the organization’s structure, goals, technological position and size to select the appropriate leadership style (Stallard 2011, p. 1). In addition, he was able to incorporate such aspects with his management skills in running the company.

Leadership Orientation

Relationship Oriented

Under this principle, the leader becomes greatly concerned about personal associations with other team members (Gill 2011, p. 64). In addition, they pay more attention to the interests of other players and willing to resolve conflicting issues. In this effort, Schultz managed to pull group towards a common destiny, thereby accomplished several duties at the corporation (Stallard 2011, p. 1). Furthermore, the combined effort made him and the group member manage very complex and delicate organizational issues, regarding decision making, conflict resolution, thus made the company achieve maximum success while serving as the Company CEO (SeaZone 2009, p. 1).

In propagating relationship-oriented leadership, Schultz applied the Path-goal model of administration to motivate the workers (Gill 2011, p. 67). The model involves goal setting within limited specifications and the company’s ability. Here, through setting achievable goals, the company would maximize job performance and satisfaction. Schultz effectively applied the model in setting the company goals, which were achievable. Other than setting the goals, the leader also motivated his subordinates to improve the production quality so that he could achieve the organizational and personal goals (Gill 2011, p. 68). This was an effective application of his leadership orientation and interest in the industry.

Additionally, the leader managed the situations under different controls in an organized manner, making the company succeed in its expansion and development efforts (Gill 2011, p. 72). For example, during high, moderate and Low control conditionals, the CEO adopted various leadership strategies to maximize the organizational gains.

In times of high control conditions, the leader tends to be in control of most company operations. This period is typically delicate for the company because the management may be deceived that the leaders do not have the enormous task of coordinating the workers, an issue that might derail the operations in the organization (SeaZone 2009, p. 1). However, for Schultz, he used the period to stabilize and enhance the company’s development through vigorously engaging the workers and management in the production system (Starbucks Corporation 2012, p. 1).

During moderate control conditions, the management focus turns to group relations to minimize anxiety and reduce unnecessary tension among the leaders. The situations enhance the group’s creativity during decision making. Essentially, most of the occurrences during this situation are either challenging or interesting. Schultz on his side enhanced the relationship between himself and the management through encouraging creativity in the production (Starbucks Corporation 2012, p. 1).

During low control conditions, the leadership struggles to galvanize the group’s support. Sometimes the task is not performed effectively as the leader lobbies for ground support and some leaders resign during this period because they might not gain sufficient support from group members. Since Schultz enjoyed support from the group because of his commitment to, and courageous leadership (SeaZone 2009, p. 1).

Task-Oriented

Under task orientation, the leader employed normative leadership models in conducting the affairs of the company (Haslam et al., 2010, p. 45). In transforming the corporation to a better entity, he majorly relied on the five basic normative leadership strategies, which include, decide, consult group, consult individually, delegate, and facilitate (Haslam et al., 2010, p. 46). Underscoring that the company management could not effectively without incorporating the five normative strategies in its duties, he made sure that the team under him received proper instructions. For instance, he consulted a lot himself and the group before making a conclusion.

As the head, he also delegated some managerial duties to his subordinates and facilitated their performance of the duties (Starbucks Corporation 2012, p. 1). Through delegation of duties, he improved efficiency in managing the company affairs. In fact, the subordinates could not resist the delegated duties because they shared the same vision of achieving success. Notably, this propelled the organization through challenges and a complex working environment towards the goal. As an innovative and progressive leader, Schultz became a successful leader in business and at individual capacity (SeaZone 2009, p. 1).

In task orientation, the leader pays more and closer attention to the task than group support (Haslam et al., 2010, p. 47). During this time, the leader does not tolerate laziness at work and would do all it takes to improve on work performance. Here, there are also high, medium and low control conditions. The leader demonstrated task orientation from the time he joined Starbucks. Soon after joining the organization, he started new company core objectives and stated the policy framework for implementing the objectives (SeaZone 2009, p. 1).

In times of high control conditions, the leader enjoys the company’s stability and improves on his relationship with other team members, and makes sure that he/she does not overlook their demands. Here, the leader should understand that the work is running uninterrupted, therefore should exercise minimal control (Starbucks Corporation 2012, p. 1). In this regard, Howard portrayed his leadership skills by embracing an all-inclusive system, where a due corporation is given priority. He also made sure that the interest of the team is considered while making key decisions in the company. For example, his response to an emergency on the situation befalling any member of the team was very fast and efficient (SeaZone 2009, p. 1).

In times of moderate situations, the leader should feel that he/she has become less effective and irrelevant. Moreover, anxiety grips the leader and he becomes more interested in monitoring the work progress. Schultz’s response was rather different; he efficiently organized his team to respond to any anxiety and whenever the situation was unfavorable. He encouraged his subordinates to prepare psychologically for developing the organization through teambuilding (Stallard 2011, P. 1). This made him a very effective leader.

During low control conditions, the leader is supposed to pick the challenges and organizes the task. Furthermore, the leader ensures the tasks are accomplished through close monitoring and assessment. Considering the leadership of Howard Schultz, he rose above the organizational challenges, dynamics, and complexity by leading a team in carrying out the structural revolution of Starbucks Company (SeaZone 2009, p. 1). In his leadership guidelines, Schultz did not give up on the focus, which was to make Starbucks Corporation successful (SeaZone 2009, p. 1). Actually, he achieved the goal.

During his tenure at the company, Howard advocated and upheld the organizational values, which matched the stakeholders’ interests (Northouse 2006, p. 99). As an outstanding leader, he embraced community support as the most important value of the company. With community support, the corporation stands to benefit from publicity and recognition as a leading institution (Northouse 2006, p. 102). Also, this has an impact on the leadership realignment, spearheaded by the CEO. Howard being the then corporation’s chief had to apply theoretical leadership skills in restructuring the company to respond to the demands. Upholding such values has played a key role in setting and maintaining standards, which are reliable for other companies (Northouse 2006, p. 104). Howard underscored that the corporation had the responsibility to serve the community because it draws much of the support from this group.

In the organization, managers make the relationship between them and employees to enhance productivity. Here, the manager might give a link between his hypothesis and moral principles. He explains categorically that for such a hypothesis to be acceptable, it needed moral support to prevent unprecedented actions. In fact, he demonstrated that the consequential actions might overrule the hypothesis despite the methodology used to ascertain it. The manager asserted that, the actions are merely attributed to the human assumptions and compelling conditions. This indicates that, their reality is never reliable as they keep shifting from one individual to another. Furthermore, he presented a theoretical view about such activities as well as the personal position and belief in the organization’s activities. Since there is no scientific proof of the existence of religious activities, the opinion that has been presented for the existence of such activities in the organization depends on one’s psychological statues and level of reasoning

Conclusion and Implications

In summary, Organizational behavior and theory are very important aspects of any company and are critical in shaping organizational success. The essay also concluded that the structure, style and kind of leaders in the organization differentiate it from the others. Moreover, practical and visionary leadership is a recipe for organizational success and company stability. The organization chosen for this analysis was Starbucks Corporation that falls under the hot drink industry.

In addition, the leader that was identified for this study was Howard Schultz who was the chairman, Chief Executive Officer and President of Starbucks Company. This leader was chosen because he transformed the organization under different situations by adopting practical leadership styles. In fact, he was considered successful because he initiated a coordinated effort with other players to learn from each of the best practices, which would create stability in the company and industry.

In analyzing the effectiveness of Howard Schultz, the contingency theories of leadership were used in studying the leader. Under the contingency theory, various models were used in rationalizing his success. The essay indicates that models such as leadership continuum, path-goal leadership, and normative leadership were used in determining the leader’s success.

As well, the essay demonstrated that, relevant concepts, models and theories could be used in describing the leader and his management strategies. Notably, Howard Schultz proved to be a pragmatic and dedicated leader and very passionate about his role as a leader. Moreover, the analysis showed how effective the person’s leadership was, and the reasons for considering his management style as effectual. His tactful and innovative leadership propelled the organization through challenges and a complex working environment towards the goal. In addition, Schultz became a successful leader in business and at an individual capacity that earned him reputation.

Implications

On implication, the essay showed that there was need to increase innovative leadership if the company has to be successful. The company management needed to enhance coordination among themselves and with the whole group to facilitate the operations. The essay also implies that the company might only be successful if the leader had the right orientation. Delegation of duties was another implication of the essay in order to improve efficiency in managing the company affairs. In addition, the essay also implied that the company needed to improve on its decision making strategies, enhance group and individual consultation, and facilitate the performance of duties.

References

Arthur, T., & Gamble, J., 1997, Starbucks Corporation, McGraw Hill, New York.

Antonakis, J., Cianciolo, T., & Sternberg, R., 2004, The Nature of Leadership, Sage Publications, London.

Cole, G., 2003, Management Theory and Practice. Cengage Learning, London.

Gill, R., 2011, Theory and Practice of Leadership, Sage Publications, London.

Haslam, S., et al., 2010, The New Psychology of Leadership, Identity, Influence and Power, Psychology Press, New York.

Northouse, P., 2006, Leadership: Theory and Practice, Sage Publications, London.

Robbins, S., & Judge, T., 2009, Essentials of Organizational Behavior, Pearson Education, New York.

SeaZone, 2009, Successful Application of Organisation Behaviour: Starbucks, Web.

Stallard, M., 2011, Howard Schultz’s Connection and Leadership, Web.

Starbucks Corporation, 2012, Financial and Strategic Analysis Review, Web.