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Axia College Material

Appendix A

Final Project Overview and Timeline

Final Project Overview

The final project for MGT 245 is a 2000- to 2500-word research paper on the successful and/or unsuccessful application of organizational behavior concepts in any organization. Select and research three to five organizational behavior main concepts that, uniquely practiced, make your chosen organization either successful, unsuccessful, or a combination of both. The organization you select should provide you with ample opportunities for research, since you will be required to use five to seven references as part of your research. The final paper should be formatted according to APA guidelines, and contain the following elements:

• An introduction and a thesis statement

• A body with supporting evidence and in-text citations

• A conclusion

• A reference list with at least five to seven sources

Choose three organizational behavior main concepts. Your research should uncover how your selected organization successfully uses, or suffers by ignoring, any three of these concepts:

• Decision Making

• Motivation

• Group Behavior

• Communication

• Power and Politics

• Organizational Structure

• Organizational Culture

• Human Resources Practices

• Change Management

Be sure to provide multiple examples of the main concepts as practiced at the organization.

Many organizations use organizational behavior concepts, but not all organizations publicize their methods for success or missteps to embarrassing failures. Select an organization for which a good amount of research has been conducted and has been made publicly available.

Selected organization: Starbucks

READ ME! READ ME! READ ME! READ ME! READ ME! READ ME!

PLEASE NOTE: This is a sample paper. Please use this is as a study guide only. I would advise that you do not turn it in word for word as your own work or you risk plagiarism.

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Starbucks Organizational Behavior

“Organizational behavior (often abbreviated as OB) is a field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness” (Robbins, 2003, p.8). Within this definition organizational behavior comprises a number of concepts which can determine the success or failure of an organization. This paper discusses three such concepts including organizational culture, change management through inspired leadership, and motivation in the form of a motivated workforce which have contributed to the ongoing success of Starbucks.

Company Background

Starbucks is a chain of highly successful and popular coffee bars founded in 1971, by three coffee lovers, Gordon Bowker, Jerry Baldwin, and Zev Siegl. Baldwin and Bowker were fond of Peet's coffee, which they drank when they were at college in San Francisco. Even after they moved to Seattle, they continued mail-ordering Peet's coffee. On one such occasion, Bowker conceived the idea of opening a coffee shop in Seattle to supply world-class coffee to Seattle residents. He discussed it with Baldwin and his neighbor Siegl, and together, the three men set up the first Starbucks store in Seattle. Starbucks originally sold only whole bean coffee. The coffee bar concept evolved much later as the result of the arrival of another key player, Howard Schultz. Starbucks grew at a slow pace initially and at the end of its first decade in 1981 there were only four Starbucks stores, although the partners also opened a roasting plant in Seattle. In 1981, Howard Schultz, a house wares company executive from New York, became involved in Starbucks as a partner. In 1987, Baldwin, Bowker and Siegl decided to sell Starbucks, with its six retail stores, roasting plant, and the corporate name to Schultz and a group of local investors for $3.7 million. Starbucks grew rapidly under Schultz's leadership. During the late 1980s, the company expanded into Chicago, Vancouver and Portland. By the early 2000s, there were nearly 9,000 Starbucks outlets across the world and the company's eventual retail target was to open 30,000 outlets (ICMR, 2005).

Organizational Culture

Organizational culture is the set of shared assumptions, values, beliefs, behaviors, practices, norms, and products that define an organization. One of the keys to Starbuck’s success, as in most successful organizations, is the people focused organizational culture that permeates the compnay (Keim, 2006). In short, Starbucks’ has painstakingly and diligently created a highly customer responsive culture.

This company culture is evident in Starbucks’ Mission Statement as well as in all its marketing communications. Starbucks’ Mission Statement says that the company’s mission is “To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time” (, 2008). Throughout the longer description of the mission statement the company emphasizes its care for individuals and improving the quality of their lives. From coffee growers to employees who Starbucks calls “partners“ because of their passion for their work, Starbucks emphasizes care, compassion, embracing diversity, spreading joy, and individual and collective responsibility and accountability toward individuals. In addition the company expresses a strong ongoing commitment to leadership in all facets of its business toward the environment. The company aims to fulfill this commitment by: gaining a thorough understanding of environmental issues and sharing information with its partners, creating innovative and flexible solutions to effect change, endeavoring to buy, sell and utilize environmentally friendly products, understanding that fiscal responsibility is vital to a positive environmental future, instituting environmental responsibility as a corporate value, assessing and monitoring its progress for each project and encouraging all partners to be a part of the company’s mission (, 2008).

Starbucks also takes the highly proactive step of helping new employees adapt to its culture through the adaptation process of socialization. All new employees at Starbucks undergo 24 hours of training. Starbucks offers classes on everything necessary to transform new employees into brewing consultants. This includes learning the Starbucks philosophy, the company jargon (for example phrases like “half-decaf double tall almond skim mocha”), and also how to assist customers in making decisions about beans, grind, and espresso machines. As a result, Starbucks’ employees not only understand the company’s culture but also project a highly effective enthusiastic and knowledgeable image of the company when interacting with customers (Robbins, 2003, p.532-533).

Change Management through Inspired Leadership

Successful business cultures result directly from the convergence of effective leadership and smart strategy (Keim, 2006). Leadership can defined as the ability to influence, motivate, and enable groups of people to contribute to the achievement of organizational goals (Robbins, 2003. p.314).

Howard Schultz, chairman of Starbucks is the type of leader who achieves his effective leadership through being the corporate caregiver and truth teller. His distinctive leadership style is based on an idealism that seems at odds with a tough global economy that at times has damaged both business credibility and employee morale. For example he holds a monthly town hall meeting taking questions from about 250 of his top managers where information sharing is frank and free. During such meetings Schultz freely discusses even controversial change management topics such as outsourcing with the company’s technology department which could eventually see their jobs migrate offshore. It is an emotionally charged labor issue that often happens when companies experience change and Starbucks employees see as a test for corporate concern. Schultz realizes that he has to balance being the leader of a competitive company that has to remain a benevolent employer at the same time. While he realizes that there are no easy answers to issues like this, he also recognizes the value of open and honest communication between management and employees. On one occasion he invited the entire technology department to talk with him and senior management about outsourcing when a tough outsourcing question was asked of him during one of his town hall meetings (Meyers, 2005).

Although caring and benevolence are not always part of corporate change management teaching lore, they are the values that anchor Schultz's leadership philosophy as he looks for ways to build connections between Starbucks and its stakeholders through showing them that the company has heart and conscience. For example under his leadership Starbucks's gives its baristas a "Green Apron Book" that urges them to "be genuine" and "be considerate." The company also strives to treat its coffee growers who often reside in poorer countries with dignity and buys their harvests at above-market prices. Schultz is committed to leaving no one behind while he leads the company into the future, an all too rare quality in business leaders today. He is completely dedicated to upholding Starbucks’ deeply held cultural values of respecting and appreciating employees as much as customers. He does not see these high ideals as being in conflict with the bottom line because he sees all long-term shareholder value as being linked to building long-term value for employees as well. This does seem to translate into success for Starbucks as Wall Street the company’s stock more than doubled between 2002 and 2005. Schultz's compassionate and forthright leadership style gives employees the feeling of being true partners in the business and in the change process and not just hourly wage workers. It is why Starbucks’ baristas are so friendly and passionate about their work and why they have such good relationships with their customers (Meyers, 2005).

As Starbucks’ challenges increase Schultz remain determined to stay on the path of compassionate and forthright leadership by constantly checking his decisions against the company’s mission and cause while leading positive change toward innovation to increase the company’s opportunities. He is an exceptional leader who is able to act in the present moment while cultivating and instilling in Starbucks stakeholders a vision of a radically different future which is possible to achieve. Schultz continues to push Starbucks toward renewal and reinvention in good times and in bad. As Schultz himself once said, "Being a great leader means finding the balance between celebrating success and not embracing the status quo," he muses. "Being a great leader also means identifying a path we need to go down and creating enough confidence in our people so they follow it and don't veer off course because it's an easier route to go" (Meyers, 2005). Schultz will not allow complacency or an entitlement culture to take hold at Starbucks as he recognizes that if a company has an enemy or adversary, it is more often than not one from within such as bad organizational behavior like complacency or bad leadership (Meyers, 2005).

Motivation: A Motivated Workforce

Companies with reputations as a good place to work—such as Starbucks— have a big advantage in getting and keeping high-performing employees (Robbins, 2003, p.3). Organizations that put people first have a more dedicated and committed workforce. This, in turn, converts into higher employee productivity and satisfaction. These employees are willing to put forth the extra effort—to do whatever is necessary to see that their jobs are done properly and completely. People first strategies also lead to organizations being able to recruit smarter, more conscientious, and more loyal employees (Robbins, 2003, p.29).

It was no surprise to those familiar with the company's human resources management policies and work culture when in January 2005 Starbucks placed second among large companies in the Fortune "Best Companies to Work For" survey (ICMR, 2005). Starbucks has gained competitive advantage by designing a work environment that allows employees the freedom to be their best selves and consistently outperform competitors’ employees (Young, 2007).

In general, the retail industry is well known for its unresponsive attitude towards employees. Despite the fact that front line employees are crucial to the success of retail businesses, most retail companies do not foster and maintain strong relationships with their employees. Such companies consequently suffer from a high rate of employee turnover. For example in the early 2000s, the employee turnover rate in the retail industry stood at about 200 percent. In contrast Starbucks stands out for its employee-friendly policies and compassionate work culture. The company is especially well known for being one of the first companies that extended their benefits program to part-time workers; something that not many other companies offer even now. As a result, Starbucks employees remain among the most productive in the industry and the company has a relatively low rate of employee turnover (ICMR, 2005).

One of the ways that Starbucks uses to motivate its employees is through using stock options to create a company-wide “ownership” culture by focusing employees’ attention on the employers’ financial performance. For Starbucks this has had the effects of creating a pay-for-performance climate, fostering pride of ownership, raising morale, encouraging employee retention, attracting new employees, and motivating front-line employees who interact with customers. Starbucks’ experience provides insights into the power of stock options as a motivator. Their program began in 1991. Each employee was awarded stock options worth 12 percent of his or her annual base pay. Every October since then, high profits have allowed Starbucks to raise the grant to 14 percent of base pay. An employee making $20,000 a year in 1991 could have recently cashed in his 1991 options alone for more than $70,000.Starbucks’ management believes stock options allow employees to share both the ownership of the company and the rewards of financial success. And management contends that it’s working. The company’s CEO says, “People started coming up with innovative ideas about how to cut costs, to increase sales, to create value. Most important, they could speak to our customers from the heart, as partners in the business.” (Robbins, 2003, p.210). Starbucks’ ambitious expansion program would not have been successful without the company’s generous human resource policies. These policies were strategically sound and extremely practical, because they kept the turnover low and provided a ready pool of experienced employees to support the company’s expansion (ICMR, 2005).

Conclusion

Positive paths of organizational behavior by individuals, groups, and the organizational structure itself can have a profound impact on a business as they can propel it toward enormous success. Starbucks is an organization that has achieved such positive paths of organizational behavior in the crucial areas of organizational culture, change management through inspired leadership, and motivation in the form of a motivated workforce. Starbucks continues to succeed in business despite tough economic challenges because of its unfailing diligence in creating and supporting a highly customer responsive culture, chairman Howard Schultz’s unflinching commitment to compassionate, truthful and innovative leadership in change management and building an organization that inspires commitment and loyalty from stakeholders through always putting people first.

References:

ICMR (2005). Starbucks' human resource management policies and the growth

challenge. Retrieved December 3, 2008 from

Keim, G. (2006, October 25). Effective Leadership: Building a successful

corporate culture. Retrieved December 3, 2008 from

Meyers, W. (2005, October 31). Conscience in a cup of coffee. U.S. News &

World Report, 139(16), p48-50, Retrieved December 4, 2008 from MasterFILE Premier database.

Robbins, S.P. (2003). Organizational behavior (11th ed). Upper Saddle River,

N.J: Pearson Education, Inc.

(2008). Our Starbuck’s mission. Retrieved December 3, 2008

from

Young, J. (2007). High performance and corporate culture. Retrieved December

3, 2008, from

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