Starbuck Company Case: Howard Schultz Leadership Style Essay

The Chief Executive Officer’s Leadership Style

Howard Schultz; the Starbuck’s chief executive officer (CEO) is a transformational leader. Schultz trusts in motivation and moral support. Moreover, he believes in organizational growth. Harrison (2005) alleges that Schultz persuades his employees to come up with novel ideas. He challenges status quo, and this underlines the reason Starbucks has achieved its current success in terms of product diversification and brand positioning. Schultz is a good communicator and uses personalized consideration. He deals with each staff individually and supports them based on their needs. As a way to motivate his staff, Schultz acknowledges the contribution of every employee.

At times, he makes personal calls and sends emails to employees to seek their advice. Harrison (2005) asserts that Schultz has empowered his staff. For instance, employees have the liberty to select their working hours. His leadership style has helped to motivate employees, thus guaranteeing a continued growth for the company. One of Schultz’s goals is to ensure that Starbucks dominates the coffee market. Hence, He has guaranteed that employees know about his vision. Besides, he has instilled the idea in his staff. Today, all Starbucks’ workers share in the desire to dominate the coffee market.

Schultz Leadership Style and Organizational Culture

George (2007) claims that Starbucks’ workers are known as baristas. The company regards its workers as the image of the enterprise. One of the company’s cultures is the sustenance of an uplifting experience for its customers (George, 2007). Schultz has encouraged innovation in Starbucks leading to the enterprise offering the best beverages in the market. He encourages his staff to provide personalized services. Hence, the company has a catchphrase that encourages staff members to serve one client at a time. Starbucks is dedicated to creating a culture of legendary services. The company has recruited a cultural specialist to help it achieve this objective.

George (2007) holds that Starbucks entrusts its staff with the responsibility to preserve organizational culture. Schultz allows employees to buy company’s stock as a way to motivate them. In addition, Starbucks believes in diversity and inclusion. The company hires employees from diverse backgrounds as a means to ensure that it offers customized services. Schultz advocates service diversification. He maintains that it is only through product and service diversification that a company can remain competitive. Hence, he promotes the culture of inclusion by employing staff from different regions.

As aforementioned, Schultz is a good communicator. In addition, he encourages communication among the employees. Communication helps to ensure that each customer receives what s/he orders. Schultz believes, “people do not think about just how much you realize, but how much you care” (George, 2007, p. 54). Consequently, he encourages his staff to be social conscious. Presently, Starbucks embodies a number of features that aim to improve customer experience. The features include focusing on details, aggressiveness, teamwork, stability, and customer-centered. Starbucks ensures that customers enjoy a relaxed environment. Besides, Schultz takes time to relate to each employee as a way to encourage collaboration and promote innovation. Consequently, employees are dedicated to their duties since they develop a sense of ownership of the company.

Schultz’s Personal and Organizational Values

Howard Schultz desires to unwind. According to Marques (2008), Schultz encourages employees to be open. He always listens to all workers regardless of their position. Besides, he encourages open communication where employees are free to share their opinions and air their complaints. His desire to unwind has made him establish a calm and relaxed environment at Starbucks. Customers like visiting the business because it provides a serene environment where clients can sit, think and unwind. Marques (2008) supposes that Schultz values employee growth and development. He believes that employee training helps not only an organization to enhance its productivity, but also employees to grow professionally.

It underlines the reason Starbucks has partnered with Arizona State University. Schultz assists his staff to acquire education by paying part of the school fees. Apart from employee growth, Schultz values innovation and creativity. He trusts that a company cannot be competitive and sustainable unless it is innovative. Schultz discourages complacency (Marques, 2008).

He always advocates reinvention and self-renewal. Reinvention and self-renewal can only be achieved if employees have the courage to take big risks. Consequently, Schultz has helped the company to sign deals with businesses and individuals like Oprah Winfrey in a bid to stay competitive.

One of Schultz’s organizational cultures is aggressiveness. He maintains that a company cannot overcome competition unless it is aggressive in terms of product differentiation and customer acquisition. Therefore, he pushes employees to remain curious and identify potential opportunities. According to Marques (2008), in Starbucks, one achievement paves way for another goal. Schultz does not stop after accomplishing his goal. Instead, he embarks on planning for the next objective. Apart from aggressiveness, Schultz is also team oriented. Schultz’s aim is to see Starbucks succeed and open more branches worldwide. Moreover, he is committed to ensuring that the company does not grow at the expense of employees. Hence, he spends a lot of time with staff and guarantees that the company helps employees to grow both financially and intellectually.

Shultz’s Values and Ethical Behavior

O’Neill (2009) alleges that Starbucks is regarded as one of the most ethical institutions worldwide. O’Neill (2009) asserts, “Throughout history, Starbucks has embedded acting ethically as a cornerstone to its culture and to how it works every day” (p. 28). Schultz encourages employees to execute their duties with thoroughness. He treats all employees equally and encourages communication among the staff. His love for open communication has led to employees treating each other with respect. Besides, it has made employees to offer customized and quality services. Schultz maintains that each Starbucks’ store is a constituent of a society. Hence, he requests employees to be good neighbors (O’Neill, 2009).

Besides, he encourages the different stores to assist in uniting the community and work towards improving its living conditions. Schultz believes that leadership does not entail giving donations to the community or communicating organizational values. Instead, leadership involves exercising organizational values (O’Neill, 2009). He recommends that corporate leaders should evaluate their contribution to the society.

Schultz values social responsibility. Hence, he has instilled the same value in his workers. Employees are passionate about offering quality products and services. Consequently, they ethically source for the best coffee beans. Moreover, they care about their customers and coffee beans suppliers (O’Neill, 2009). Starbucks’ workers considered treat each customer as special. Consequently, they ensure that every customer enjoys his/her stay in the company. Apart from offering quality beverages, Starbucks’ employees value human connection. They take time to relate to their customers and fortify their lives. Through interaction, employees are able to identify emerging customer needs. Moreover, they get customers’ opinions on what the company ought to do. Indeed, the current growth is as a result of employees’ interaction with customers. Apart from organizational growth, the company has helped the community to improve its living standards by enlightening it on how to preserve the environment.

Schultz’s Greatest Strengths

One of Schultz’s greatest strengths is the ability to establish strong brand position. Schultz has positioned Starbucks as a high-end brand in coffee industry. Starbucks has managed to provide exotic and delicious coffee blends under Schultz’s leadership. Today, the company offers the best coffee in the United States. Schultz is gifted in employee development and management (O’Neill, 2009). After becoming the CEO, Schultz embarked on an employee development campaign aimed at assisting Starbucks to offer quality services. Today, he has established an organizational culture that values style, sophistication, and knowledge.

Customers praise Starbucks for its sophisticated and stylish atmosphere. Prabhakar et al. (2014) allege that Schultz is a good team player. He has helped not only to engender teamwork within Starbucks, but also communication and respect. Moreover, he has assisted the company to recruit competent and dedicated workers. All Starbucks’ employees are vetted by a panel of human resource, which guarantees that the company hires the best.

Schultz’s Greatest Weaknesses

One of Schultz’s greatest weaknesses is that he talks a lot, thus subjecting the company to scrutiny. Starbucks is known to be a progressive and respectable company. Schultz’s participation in political affairs might subject Starbucks to public scrutiny. He has gone on the record as one who advocates rejecting contributions. Such a stance may affect the company’s image. Schultz has not been able to reduce operation costs in Starbucks (Argenti, 2004).

His desire to offer customized and quality services have forced the company to raise employees’ salaries. Besides, the company has been compelled to provide benefits to all workers. Hence, Starbucks has witnessed an increase in operation costs under Schultz’s watch. Another weakness is that Schultz has subjected Starbucks to distraction. Despite participating in corporate social responsibilities, Schultz has not managed to exploit the natural dynamics of the coffee industry. Therefore, in case the company encounters constraints, it would be hard for Schultz to convince the public that he is in a position to rescue the company.

Recommendations

Schultz has subjected Starbucks to the danger of losing its clients by participating in politics. Consequently, it is important for Schultz to remain impartial on partisan matters. Besides, he should avoid airing his opinions about controversial issues. Airing one’s opinions about controversial issues may lead to clients shifting to companies that do not share their opinion publicly. For instance, Starbucks lost many customers after Schultz expressed his opinion about gay marriage. Hence, for the sake of the company, Schultz should remain neutral even if he is not happy about some political issues. Schultz has built his legacy in Starbucks. He has helped Starbucks to become a domestic name in the United States. To safeguard the company’s image, Schultz should stay away from politics and cease commenting on contentious political matters. He should focus on helping the company to expand its market share if he wants to be remembered for his achievements.

Impacts of Communication and Collaboration

Communication and collaboration are essential for any organization. They ensure that activities run smoothly without interruptions. One of the reasons why Starbucks offers efficient services is due to effective communication and teamwork. Collaboration between baristas, cashiers and chefs ensures that customers get quality services (Prabhakar et al., 2014).

Besides, communication and collaboration between Schultz and employees has helped the company to expand its operations to different countries. In addition, communication and teamwork have helped Starbucks to develop novel products to meet customer demands. Prabhakar et al. (2014) allege that Starbucks uses persuasive communication to alter consumer behavior and attitude towards the company. Employees work together to change customers’ perceptions of Starbucks’ products and services. For instance, they collaborate in preparing and serving coffee. Besides, they assist new recruits to adapt the company’s system by assisting them in areas that they encounter challenges. Teamwork and communication are what have made Starbucks to attract a big customer base.

Impacts of Power and Politics

Power and politics have had adverse effects on Starbucks. For instance, after the company alleged that firearm holders had the right to carry the guns it became enmeshed in an unwanted clash. Many people could freely bring their weapons to the business (Argenti, 2004). Schultz had to publish a report to clarify the company’s position. He realized that the issue was affecting the company’s growth since many customers feared visiting Starbucks. In other words, Starbucks’ involvement in politics affects its performance. The company is at times torn between embracing some political values and disregarding them. The major problem arises in striking a balance that satisfies all its target customers. Starbucks has been blamed for tax avoidance in the United Kingdom (Argenti, 2004). Some customers even urged people to stop using Starbucks’ products. Nevertheless, the company moved fast to assure the public that it was a tax compliant firm. Schultz assured the public that Starbucks was dedicated to improving the living standard of its customers and it could never evade tax.

References

Argenti, P. (2004). Collaborating with activists: How Starbucks works with NGOs. California Management Review, 47(1), 91-118. Web.

George, B. (2007). True North: Discover your authentic leadership. San Francisco: Jossey-Bass. Web.

Harrison, J. (2005). Exporting a North American concept to Asia: Starbucks in China. Cornell Hospitality Quarterly, 46(2), 275-283. Web.

Marques, J. (2008). Spiritual performance from an organizational perspective: The Starbucks way. Corporate Governance: The International Journal of Business in Society, 8(3), 248-257. Web.

O’Neill, J. (2009). Hotel brand strategy. Cornell Hospitality Quarterly, 51(1), 27-34. Web.

Prabhakar, A., Harvey, B., Wicky, S., Hirsch, J., Thrall, J., & Okul, R. (2014). What’s brewing: How interventional radiologists can learn from the reinvention of Starbucks. Journal of the American College of Radiology, 10(8), 559-561. Web.