Starbucks Corporation is an American coffee company situated in Washington. It was founded by three scholars at the University of San Francisco who had ambitions of selling high quality coffee beans and equipment (Simon, 2009). During that time the company provided only foodstuffs such as coffee and ready-made sandwiches.
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It was also involved in entertainment. As time went by the company widened its scope of operation and currently the company also offers beers, wines and appetizers. Apart from these, it is believed to be the largest coffee house in the world with branches and outlets in over 62 countries worldwide and an estimated employee population of about 150,000 people. It is also one of the major stakeholders of the World Cocoa Foundation (Gordon & Schultz, 2011).
Starbucks Corporation has drawn much attention from economic investors and the worldwide business community due to its unique structure and expansion rate. The corporation has exhausted every avenue at its disposal related to the coffee industry to increase its revenue collection. The corporation has diversified its products to the entertainment sector as well as provision of wines and beers which is a sharp contrast to the mono product supplier it was years back (Schultz & Yang, 1997).
It also offers incentives and perks to its clients enabling it to maximize on customer loyalty as well as expanding the market for its products. The corporation’s management is also designed in a way such that only individuals at the top must work hard to attain the overall success of the company.
For instance, in the year 2007 when coffee sales went down, Jim Donald was asked to step down after only two years in office as the chief executive officer of the corporation (Behar, 2007). This has largely contributed to the rapid expansion of the corporation amidst tough financial times.
Howard Schultz is one of the brains behind the success of Starbucks Corporation. He is the founder and current chairman and chief executive officer of the corporation. Schultz is an American businessman and writer. His superb managerial skills and entrepreneurial skills have earned him several recognition awards (Schultz & Yang, 1997).
His key contribution was that he championed the advent of espresso coffee. It is this idea that introduced coffee restaurant business and which finally saw the founding management of Starbucks sell their retail unit to Howard Schultz. His determination in business and a keen interest also saw him ranked the 134th richest person in the United States of America (Watts, 2008).
Howard Schultz rose in rank until finally he took over as the chief executive officer in 2008 from being the marketing director. He was appointed chief executive officer when the corporation had started to realize a downward sales trend and his immediate task was to stabilize the sale and help increase returns under severe economic circumstances. Under his management, the Starbucks Corporation has expanded its scope of operation as far as Mexico, Japan, Turkey and Germany (Fiedler, 2007).
Having started as a sports club owner, Howard Schultz has vast knowledge of economic trends in the United States, hence he is better positioned to cope with tough conditions at the managerial level. One of his outspoken key concerns is the desire to address unemployment and building consumer confidence. These are perhaps his core pillars of success as a top most manager of a world class business corporation.
One of the major ethical concerns for Howard Schultz is the need to tackle unemployment. Under his tenure at the helm of the Starbucks, he has relentlessly fought to eradicate unemployment; a fight he has partially won. In one of his talks as a guest speaker at the University of Kellogg, he pointed out that the reason behind opening up so many outlets worldwide is not only to attend to the larger customer fraternity but also to offer employment to as many people as the corporation can employ (Kouzes & Posner, 2002).
Schultz says that Starbucks Corporation is in the process of making programs that not only aim at selling coffee but also helping the country recover from regression. The corporation has an estimated current employee population of close to 200,000. Schultz believes that creation of employment opportunities is the key strategy towards economic development.
Although he was once afraid of competition from other high quality coffee brands, Schultz has pointed out that he does not care as long as by offering lighter roasted coffee, the corporation was offering jobs for the people. This paints him as both an entrepreneur concerned with civilian economic empowerment through job creation (Watts, 2008).
Howard Schultz has also steered rapid expansion of Starbucks through cordial customer relations. In order to counter competition from other restaurants, he helped the corporation adopt the idea of offering perks and incentives to its customers. Customers are given cash discounts, free internet services as well as free yoghurt. At one point, the Starbucks premise was faced with a serious problem of customers entering with guns.
This really worried other customers within the premises and some even opted for other restaurants thus avoiding the Starbucks. The dilemma here was between telling the customers who owned guns to keep off and subsequently lose them or letting customers without guns find other options besides the Starbucks. Howard Schultz opted to write to all the customers on the need to avoid entering the Starbucks’ premises with guns and the effects the same impacted on other customers.
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In the long run, he was able to retain both customers with and without guns. Thus, good customer relation is a key principle exhibited by Howard Schultz and he has successfully applied this to win the corporation’s customers (Simon, 2009).
Furthermore, while addressing the annual stakeholders meeting, Howard opted to address moral issues affecting the corporation. The shareholders had complained to the chairman that the corporation had lost many customers due to its stance stand in regard to gay marriages in which the corporation supported.
In response, Howard pointed out that not every decision taken by the management is necessarily an economic decision. He insisted that the corporation employs thousands of people and must strive to embrace diversity at all cost.
At that point, the chief executive officer reiterated that the Starbucks Corporation will stand to support gay marriage and whoever was not satisfied with the decision was at liberty to sell his or her shares in the corporation and invest anywhere else (Behar, 2007).
This is one of the key decisions that led to a lot of criticism of Schultz’s leadership since he took over from Jim Donald. It is believed that the stance taken by the chief executive officer of the Starbucks has consequently seen the support for gay marriage in the United States rise to 58% against 36% of those against it (Gordon & Schultz, 2011).
Howard Schultz also presents himself as an example to emulate in leadership corridors. He is trustworthy and always working to fulfil his promises. For instance, in an attempt to increase the number of shareholders, he raised their subsequent bonuses to 38% per annum. Amidst tough financial strains, many thought this rate could be reviewed downwards; a move that could be welcomed by the stakeholders. However, he managed to sustain the same high rates until the situation normalized.
The employee perks including medical and insurance covers have been in place despite the hard economic times. This has increased not only the shareholder but employees as well as the customers’ faith in his management (Watts, 2008).
Faithfull and trustworthy leaders are vital for survival and development of any enterprise as depicted by Howard Schultz since they offer the benchmark for evaluation of the enterprise in terms of customer satisfaction and the surety of the stakeholder recouping their investments. Through such personal virtues, more capital has been made available for expansion of the corporation into various other countries worldwide (Kouzes & Posner, 2002).
It is clear from the above illustrations that the success of any business venture goes hand in hand with the management. Managers with great moral and ethical virtues will always speed up the expansion rate of the enterprise since the employees and other stakeholders feel secure working under such managers.
Howard Schultz, though criticized at some point, proves to be the pillar behind the success and rapid expansion of Starbucks Corporation. He founded the corporation and is still available to offer the best management to ensure that the corporation attains its core missions and objective.
Behar, H. (2007). It’s Not About the Coffee: Leadership Principles from a Life at Starbucks. New York, NY: McGraw Hill.
Fiedler, F. (2007). A theory of leadership effectiveness. New York, NY: Harper and Row Publishers Inc.
Gordon, J., & Schultz, H. (2011). Onward: How Starbucks Fought for Its Life without Losing Its Soul. New York, NY: Rodale.
Kouzes, J., & Posner, B. (2002). The leadership challenge. San Francisco, SF: Jossey-Bass.
Schultz, H., & Yang, D. (1997). Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time. New York, NY: Hyperion.
Simon, B. (2009). Everything but the Coffee: Learning about America from Starbucks. London, UK: McGraw Hill.
Watts, T. (2008). Business Leaders’ Values and Beliefs Regarding Decision Making Ethics. Los Angeles, CA: LULU.