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Despite the economic downturn business is to continue operating and developing as it is the only way to economic recovery. From my point of view, entrepreneurs could use this time to assess businesses and improve its efficiency. This could be done through applying decision making and conflict solving techniques. In addition, the organizational design of the company has to be reconsidered in order to minimize expenses and increase efficiency.

Our attention will be focused on large-scale enterprises which actually have financial resources for creating organizational culture and implementing various managerial practices. As an example, the paper will analyze Starbucks Corporation, American-based coffee roaster and coffee beverages producer.

Conflict management and decision making exist in a tight connection with each other as the every alternative applied to a particular situation is a result of decision making while its consequences can generate or avoid conflict. Moreover, organizational structure is to be put on the edge as it influences these issues from the very beginning. Organizational design determines the performance of the particular enterprise and its operational activities.

The purpose of this paper is to discuss conflict management approaches and decision making strategies and choose the most applicable ones to the large-scale business units. The decisions regarding organizational design of the business will be analyzed as well. In particular, creative decision making and evidence-based approaches will be compared in terms of its application to the chosen organizational design.

Starbucks Company has been showing excellent performance since its establishment in 1971. It started in Seattle but quickly embraced the U.S. and moved globally. Today the Company operates about 17,000 retail stores in more than 55 countries which deliver roasted and brewed coffee, merchandise and various consumer products. All Starbucks products are marked with exceptional quality and personal approach to every customer (Starbucks Company Profile, 2011).

In 2011 Starbucks reported on the highest annual revenue ever of $11.7 billion. During the last year Starbucks entered El Salvador, Guatemala and the Netherlands markets and opened almost 900 new stores, contributed to the local nonprofit organizations and global initiatives while returned almost $945 million to shareholders through share purchases and dividends (FY2011 Annual Report, 2011).

Starbucks was incorporated in 1985 under the laws of the State of Washington and went public in 1992 at a price of $17 per share. Today, Starbucks Corporation’s common stock is listed on Nasdaq with a price of $48.76 per share (Nasdaq, March 2, 2012).

To make a conclusion on the financial performance of the Company, it shows stable record and high investment attractiveness. Regular dividend payments, active trading at stock exchange and firm financial position speak of Starbucks’ potential and financial strength. In addition, the quality of Starbucks coffee and products assures the Company’s profits and strong financial records.

But business today is far more than financial benefits. Business is no longer detached from society. In other words, a business enterprise constantly interferes with the local community. Moreover, business today is to play an active role in local community’s life as it has substantial resources to bring actual changes for good. Starbucks mission statement appeals to these issues directly. Starbucks mission statement is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Company Profile, 2011). The way Starbucks treats local communities and contributes to its needs brings benefits for both sides.

The Company follows specific guidelines that help it in measuring the quality of work and services. First of all, the highest standard of excellence of coffee has been put on the edge of the whole business. However, the profitability is recognized to be essential for future success. (Shah, Thompson & Hawk, 2007). In addition, Starbucks celebrates diversity and aims to create great working environment where everyone is treated with respect and dignity. This approach is considered to be universal to every country and flexible enough to meet the requirements of modern business environment.

To sum up, Starbuck has exceptional organizational culture which undoubtedly affects its performance reflected in net income. In other words, high moral values and active involvement in social responsibility programs appeal to consumers and popularize Starbucks brand. Indeed, huge brand awareness is the competitive advantage of Starbucks. Despite of the fact that Starbuck got less mentions than George Coffee House and Global Living (Muhhamad Rizwan, 2008). However, due to the extensive expansion for the last five years Starbuck has win bigger market share and brand recognition. It means that positive brand image and appealing organizational culture affects the bottom line of the business.

Choosing appropriate organizational design is vital to assure continuous operation and effective performance. Generally, organizational design is equated to organizational structure and roles within a business unit when organizational design is far more complex. It is to organize all key business components like structure, labor force, performance metrics and assessment etc. so that they align with the overall strategy.

Strategy, size, environment, and controls are usually taken into account while deciding on organizational design. In terms of strategic and environmental factors, there are certain issues to mention which are relevant to Starbucks. Firstly, strategic and environmental factor exist in interdependence when we talk about Starbuck as it is a global company which promotes local values and communities. Starbucks Corporation made a strategic decision to expand while being cozy place to drink a cup of coffee and chat with friends. It means that management is to take into account both global and local environment. Secondly, Starbucks’ main competitors in the coffee beverage sales are 7-Eleven, Dunkin Donuts, BIGGBY Coffee, Caribou Coffee, McDonald's, Panera Bread, and Einstein Bagels. It means that Starbuck has to find specific approach to create loyal customer base. From my point of view, carrying about local communities is a right strategy to apply.

In general, strategy of a particular organization, especially global one, is reflected in its mission statement and corporate values. As we can conclude from the mission statement of Starbucks and its corporate values the Company aligns its daily operational activities with its strategy. According to Shah et al (2007), at Starbucks the main attention is paid to participation and communication, rather than controlling and formality. Due to the spread across the globe, Starbucks has divisional structure organized by customer location to meet customers’ needs in every region.

Through various negotiation techniques a conflict at the workplace could be avoided or eliminated. However, negotiation strategies are also applied when the conflict situation has been already originated and participants want to resolve it. Any conflict at the workplace can cause permanent disruptions of operational activities so it is crucial for a team to have at least one experienced negotiator.

The main principles for resolving any conflict are probably cooperation of its participants towards constructive outcome and creating ‘win-win’ situation. Speaking of negotiation strategies in particular, it is essential to distinguish the following ones:

- Separating people (their perception and emotions) from the problem

- There is no negotiation when there is no communication – listening and acknowledgement of participants interests can help to find mutually beneficial solution.

- Focusing on interests, not positions – to resolve the conflict and negotiate a solution one should understand the underlying interests of other participants which are usually hidden.

- Working out options for mutual gain – it is more likely that both parties will have to compromise but the emphasis should be put on the potential gains, not losses.

- Separating inventing options from deciding – Brainstorming session to broaden the options for deciding is essential to see all possible potential alternatives.

- Using objective criteria – Shared standards of fairness, efficiency and values are to produce the outcome that is fair for all participants (Doye, Love & Hyer).

It is possible to use all these negotiation strategies ‘in field’ at Starbucks. In fact, the Company has been already applied many of them. For example, practice with health care plan for part-time workers represents of the main negotiation strategies. Providing the health care benefits for part-timers the company showed that their input is appreciated. This step reduced the number of baristas left, improved brand image and increased Company’s profitability.

From my point of view, evidence-based management approach and creative decision making at Starbucks are implemented simultaneously despite of the fact these two approaches seem to be contrary. According to Denise Rousseau (2006) evidence-based practice means a paradigm of making decisions that integrate best research evidence with decision making expertise and customer preferences towards the desirable result. Creative decision making is more spontaneous than planned and involves employees in decision making process. It cannot be nurtured in bureaucratic environment where people are constrained to produce innovative idea.

Regarding Starbucks expertise in creative decision making it has much unexpected decisions to share. First of all, he decided to include part-time workers in the health care plan what was the right thing to do. Moreover, when Starbucks offered health-care coverage for terminal illnesses, the Starbuck noble gesture was marked by White House.

Management understood that in order to increase company’s profitability, all workers should strive for it. To motivate staff, Schultz’s team created employee stock option plan. It made every worker a partner who understood that he would earn more if the profitability increased. That was the perfect motivation which proved to be effective.

To create the feedback, the company introduced cards which were always available to welcome the innovative ideas straightly from the staff who worked in-field. When some changes were introduced, the company used this card as a questionnaire. And Schultz read all of them to get the deeper insight of the issue. From my point of view, this commitment helped him to generate all that wonderful ideas and implement social responsibility standards at Starbucks. In addition, this is the clear example of evidence-based management when Starbucks management stepped away from general practice and sought for acknowledgement of its actions.

Conclusion: Starbucks Corporation organizational culture fully reflected in its mission statement and values. It is an impressive example of negotiation strategies implementation as well as decision making practices and organizational structure. Its management managed to create a unique combination of theoretical methodologies that suits the particular business environment.

References

Doye, D.G., Love, R.O., Hyer, T.R. Negotiation Strategies, Division of Agricultural Sciences and Natural Resources, Oklahoma State University. Retrieved March 3, 2012 from

Fiscal Year 2011 Annual Report. Retrieved March 6, 2012 from

Muhhamad Rizwan (September 1, 2008). Study of Brand Image and Brand Awareness of Starbucks, Malardalen University. Retrieved March 6, 2012 from

Real Time Stock Quotes: Starbucks Corporation (SBUX) (March 6, 2012). Retrieved March 6, 2012 from

Rousseau D.M. Is There Such A Thing As “Evidence-Based Management”? Academy of Management Review, 2006. Vol. 31, 256-268 [online] Available at

Shah, AJ, Thompson AA, and Hawk TF (2007) “Starbucks Global Quest in 2006: Is the Best Yet to Come?” in Crafting and Executing Strategy: The Quest For Competitive Advantage : Concepts and Cases, 15th Ed. AA Thompson, Jr., AJ Strickland III, and JE Gamble, Boston : McGraw-Hill/Irwin pp. 468-495. Available at

Starbucks Coffee Company (2011). Warrington University of Business Administration. Retrieved March 6, 2012 from

Starbucks Company Profile (December 2011). Retrieved March 6, 2012 from

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