Introduction to Organisational Management: Starbucks - Coursework Example

Running Head: INTRODUCTION TO ORGANISATIONAL MANAGEMENT INTRODUCTION TO ORGANISATIONAL MANAGEMENT: STARBUCKS By Professor’s name University name City, State Date Introduction to Organisational Management: Starbucks Introduction With a turnover of $14.892 billion in 2013, Starbucks is certainly a world leader in roasting, advertising, and retailing trademarked coffee products (Starbucks, 2014). Founded in 1971 by partners Jerry Baldwin, Zev Siegl, and Gordon Bowker, Starbucks grew to become the biggest coffee firm and retailer today. Headquartered in Seattle, Washington, Starbucks sells specialty and blended coffee along with custom drinks, merchandise, and foodstuffs. Other activities by Starbucks include producing and selling customer favourites such as ice-cream and tea. Howard Schultz is the present CEO of Starbucks who oversees company-held and franchised outlets in over 64 nations across Asia Pacific, the Middle East, East Africa, Europe, and North and South America (Starbucks, 2014). The goal of this report is to analyse employee motivation and organisational culture at Starbucks based on motivation and organisational culture theories. I chose the issues of motivation and organisation culture because Starbucks is popular for having above-average customer service, which they attribute to company culture and employee motivation. Analysis Motivation is crucial to organisational management and Starbucks’ management team impalements this knowledge. People rarely seek work to fulfil just one motive or need (Robbins and Judge, 2013, p. 525). Theorists of employee motivation and organisational culture propose that motivation pushes group members to put proper effort and be loyal to the group or organisation (Northouse, 2010, p. 26). These members then vow to perform tasks they accepted appropriately and embark on a real role in the task that the group originally assumed (Sadler, 2007, p. 69). A blend of motivation and organisational culture theories provide a thorough explanation on the reason people, particularly workers, are motivated (Robbins and Judge, 2013, p. 251). Issues that this section will evaluate are employee loyalty, employee needs, development of work skills, workplace relationships, and reward systems. 1) Hierarchy of Needs The Hierarchy of Needs best explains motivation at Starbucks through the strict observation of ranked needs amongst employees. Theorist Abraham Maslow developed a hierarchy of five levels even though there are numerous other needs past these levels (Robbins and Judge, 2013, p. 203). The levels are self- actualisation, esteem desires, social desires, security desires, and physical desires. Maslow argued that the levels represented the fundamental needs of any person working for an organisation. Starbucks successfully considers these needs in its pay-for-performance and material cultures but at different ways and extents (Schultz, 2012, p. 273). As a result, motivation amongst Starbucks workers varies periodically in terms of levels (Starbucks, 2014). Physical desires are in the first and bottommost level of the Hierarchy of Needs and include food, water, and income. These desires are basic and all organisations expect their staff members to have them (Robbins and Judge, 2013, p. 203). Starbucks meets these needs effectively with the provision of time-off periods for employees to eat and stable incomes and benefits packages for permanent and part-time workers. Starbucks also offers its employees discount on its products and merchandise to fulfil the needs of the lowest level on the Hierarchy of Needs. Security needs follow physical desires on the Hierarchy of Needs and consist of a workplace that meets health and safety standards. A safe working environment is a priority for Starbucks considering it ensures sanitary and safe places of work for its employees and customers with outlets meeting overall health and safety criteria (Starbucks, 2014). Starbucks employees also enjoy health benefits and insurance packages that match needs in the second level of the Hierarchy of Needs. Social needs make up the third and middle level of the Hierarchy of Needs and include compassion from employers, friendly relationships, respect from co-workers, and superiors (Robbins and Judge, 2013, p. 203). Starbucks management meets its employees’ social needs by referring to them as “partners” instead of workers. A “partner” title earns employees’ respect from their employer and motivates them to retain this title within the organisation (Starbucks, 2014). Starbucks also encourages cohesive workgroups that foster employee relationships and build bonds among them. When Starbucks meets these social needs, employees tend to be loyal and work to achieve maximum output. Esteem desires make up the fourth level and comprises of factors such as job ranking and promotion (Robbins and Judge, 2013, p. 204). Starbucks adheres to this dynamic of the Hierarchy of Needs by allowing baristas who have exhibited exceptional performance to qualify for promotion. Management at Starbucks tries to support individual employees to rise from barista to store manager ranks, and eventually to district manager. Clearly, Starbucks cannot afford to limit its workers in terms of promotion because it prioritizes employee motivation. Lastly, self-actualisation is the topmost level and includes a sense of accomplishment on top of realising mastered skills under a certain job title (Robbins and Judge, 2013, p. 204). In Starbucks, baristas and even managers go through a series of training modules that place them on correct career paths. This way, workers can realise a sense of accomplishment (Schultz, 2012, p. 273). 2) The Equity Theory Starbucks uses equal income and benefits to assure motivation amongst its workers and the Equity Theory supports this culture. Professor Adam developed the Equity Theory in 1963 to contend that when every worker gets the same compensation for work input with a corresponding output (Buchanan & Huczynski, 2013, p. 121). According to Schultz, equal benefits promote company loyalty amongst workers so that they may prolong their contracts with the organisation (Schultz, 2012, p. 39). In addition, equal benefits help meet workers’ social needs. Starbucks employees enjoy benefit packages for both part-time and round-the-clock work. Starbucks makes sure all workers qualify for insurance after a 60-hour pay. The benefits package at Starbucks entails clinical, dental, optical, paid holidays, psychological, health, or substance dependency indemnity, 401k savings, a stock option, and temporary disability insurance (Starbucks, 2014). Schultz says that when employees lack such equal benefits, they become economically and emotionally disconnected from their jobs (Schultz, 2012, p. 273). Starbucks workers expect their superiors and co-workers to redeem their performance for equal treatment. The Equity Theory argues that employers should ensure their staff members get the output similar to the input they recorded at work. This balance is an essential component of the concept behind the Equity Theory (Mullins, 2013, p. 158). Starbucks exercises effective communication between managers and subordinates. An example of this communication is when managers prepare the interviews and program work breaks and working periods to meet the needs of workers. This is why Starbucks encourages its staff to present improvement ideas and design plans to accomplish their goals at the workplace (Starbucks, 2014). The Equity Theory at Starbucks allows workers to lead to positive outcomes when their superiors consider their ideas and plans. 3) Herzberg’s Theory A pay-for-performance organisational culture also resonates with Herzberg’s Theory of motivation and hygiene elements (Belbin, 2010, p. 74). More specifically, Herzberg’s motivators of achievement and recognition are evident in the outcomes of the pay-for-performance culture from Starbucks and its staff’s perspectives. Starbucks successfully increases employee motivation by integrating elements of Herzberg’s Theory into its organisational culture. The company achieves motivation by merging clear guidance, quality response and tangible rewards, and acknowledgment-key elements to work gratification, and worker devotion (Chanchaisomphob, 2013, p. 50). In this case, the tangible rewards are employee pay and the acknowledgment is realized from performance. Herzberg argued that when an organisation meets motivators, staff members experience job satisfaction. Sets of training systems are another way Starbucks exercises Herzberg’s Theory to assure motivation and a pay-for-performance culture (King & Lawley, 2013, p. 93). Starbucks uses training systems to mentor and coach workers to enhance their work skills and push them towards the right career tracks. Under Herzberg’s Theory, motivators come into play with responsibility being the main factor that Starbucks attempts to integrate. Additionally, a pay-for-performance culture stresses the value of customers on workers and their responsibility to them. As a result, training systems make sure each Starbucks worker gets respect and care from their superiors, which they reciprocate to customers. For instance, managers acknowledge and respect staff members’ suggestions and needs (Starbucks, 2014). This relationship allows workers to have crucial roles in the organisation, exercise the right to enhance organisation policies, and participate in determining a direction for Starbucks. 4) A Pay-for-performance Culture Organisational culture is a combination of the behaviour of members of an organization with the meaning they place in this behaviour. Organisational culture often consists of the organisation’s mission, goals, language, beliefs, office etiquette, customs, and presumptions. Starbucks facilitates a pay-for-performance organisational culture (Chanchaisomphob, 2013, p. 46). A pay-for-performance culture relates compensation directly to worker productivity. This relation brings about excellent business results. Starbucks management knows a pay-for-performance culture is proficient at each levels and role of the organisation. Many organisations may find a pay-for-performance culture too abstract and hence impractical (Yukl, 2012, p. 66). However, Starbucks executives think of this culture as a priority for realizing improved financial results. A concrete pay-for-performance culture can reveal the potential of optimal worker output, keep workers joyful, and eventually promote a healthy work and personal lifestyle (Starbucks, 2014). A pay-for-performance culture enhances retention at Starbucks, which the organisation experienced a 27% rise since implementation (Starbucks, 2014). Retention requires further support from meritocratic governance that Starbucks practices. A good example of the advantages of the pay-for-performance culture in Starbucks is the recent change in the sales records of baristas across the United States. The opening pay for baristas in Chicago rose by 30 cents per hour (Starbucks, 2014). Starbucks began paying baristas $8.58 per hour after working for them for over six months and getting a “favourable performance” rating after analysis. In New York, Starbucks paid baristas $9.63 per hour after working for them for more than six months and getting a “favourable performance” rating as well (Starbucks, 2014). 5) Material Culture Starbucks also exercises a material culture of environmental conservation and ecologically friendly activities and methods (Chanchaisomphob, 2013, p. 17). Starbucks’ logo reflects the company’s material culture with the depiction of a double-tailed mermaid or “siren” on a green background (Starbucks, July 2014). The green backdrop is a symbol of the company’s devotion to environment protection and waste management. An important element of Starbucks’ material culture is waste recycling, which the Herzberg’s Theory would consider a hygiene factor (Robbins and Judge, 2013, p. 523). Managing waste and recycling lowers the company’s carbon footprint, which the firm considers a priority and contributor to the material culture. For example, paper cups that hold customers’ coffee are comprised of 10% post-consumer reused material (Starbucks, 2014). Starbucks also recycles cups to make napkins and encourages its customers to reuse the merchandise they purchase from their retail outlets. Conclusion Organisational culture at Starbucks also aims at forming a place between employees’ homes and workplaces (Storey, 2011, p. 195). Starbucks considers employee and customer motivation main concerns and integrates certain strategies to make sure these concerns are met. These strategies include integrated pay-for-performance and material cultures. A pay-for-performance culture strives to be proficient at all levels and roles within Starbucks. A material culture devotes to caring for the environment through recycling and waste management methods. Three organisational theories fit the organisational and motivation cultures at Starbucks. The Equity Theory, Herzberg’s Theory, and the Hierarchy of Needs can explain employee motivation at Starbucks. The same theories account for their smooth integration into Starbucks’ organisational cultures of pay-for-performance and material. The Hierarchy of Needs centers on worker needs that drive, control, and stop their behaviour at the workplace. The Equity and Herzberg theories explain logical, mental processes of motivated individuals. Clearly, these theories correlate with Starbucks’ organisational cultures and add to effective people management and success of the company. References Belbin, RM, 2010, Management Teams: Why they Succeed or Fail 3rd ed., Butterworth Heinemann, London. Buchanan, DA and Huczynski, AJ, 2013, Organisational Behaviour 8th ed., Pearson/FT Prentice Hall, Harlow. 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