P1-3 Choose three of the current trends and issues facing managers and explain how Starbucks

might be impacted. What might be the implications for first-line managers? Middle
managers? Top managers?

1.0 Introduction:

How can managers be classified in organizations? In traditionally structured organizations.

Exhibit 1-1 shows the level of the managers.

Exhibit 1-1 LEVELS OF THE MANAGERS

2.0 First-line managers

2.1 Definition:

At the lowest level of management, first-line (or frontline) managers the work of
nonmanagerial employees who typically are involved with producing the organization’s
product or servicing the organization’s customers.
Textbook 1: First-line managers are directly responsible for the production of goods and
services. They are responsible for teams and non-management employees. Their primary
concern is the application of rules and procedures to achieve efficient production, provide
technical assistance, and motivate subordinates.

(DAFT:2017)

Textbook 2: At the base of the managerial hierarchy are first-line managers, often called
supervisors. They are responsible for daily supervision of the nonmanagerial employees,
who perform the specific activities necessary to produce goods and services. First-line
managers work in all departments or functions of an organization.

(George & Jones: 9th edition )

Textbook 3: First-line managers make short-term operating decisions, directing the daily
tasks of nonmanagerial personnel, who are, of course, all those people who work directly at
their jobs but don’t oversee the work of others.

(Kinicki &Williams: 2015)

Example from the Case Study: (Robbins 2016)

At the end of 2013, the company had more than 200 000 full- and part-time partners
(employees) around the world.

Example from the Internet:

A workforce that heterogeneous in terms of gender, race, ethnicity, age and other
characteristics that reflects differences. Starbucks operates in many countries, therefore it
consists of diverse workforce. So as a manager it is necessary to be well-acquainted with
the diverse backgrounds of individuals in order to manage its workforce effectively. It is
most applicable for the first line managers because they are the ones who are in direct
contact with employees.
3.0 Middle managers

3.1 Definition:

Middle managers manage the work of first-line managers and can be found between the
lowest and top levels of the organization

Textbook 1:

Middle managers at middle levels of the organization and are responsible for business
units and major departments.They are responsible for implementing the overall strategies
and policies defined by top managers.

(DAFT:2017)

Textbook 2:

Supervising the first-line managers are middle managers, responsible for finding the
best way to organize human and other resources to achieve organizational goals.

(George & Jones: 9th edition )

Textbook 3:

Middle manager implement the policies plans of the top managers about them and
supervise and coordinate the activities of the first-line managers below them.

(Kinicki &Williams: 2015)

Example from the Case Study: (Robbins 2016)

Starbucks’ main product is coffee-- more than 30 blends and single-origin coffees. In
addition to fresh-brewed coffee, here’s a sampling of other products the company also offer

 Handcrafted beverages: Hot and iced espresso beverages, coffee and noncoffee
blended beverages, Tazo® teas, and smoothies.

 Merchandise: Home espresso machines, coffee brewers and grinders, premium

chocolates, coffee mugs and coffee accessories, compact discs, and other assorted
items
  Fresh food: Baked pastries, sandwiches, salads, hot breakfast items, and yogurt
parfaits.

 Global consumer products: Starbucks Frappuccino® coffee drinks, Starbucks Iced

Coffee drinks, Starbucks Liqueurs, and a line of super-premium ice creams

 Starbucks card and My Starbucks Rewards® program: A reloadable stored-value

card and a consumer rewards program.

 Brand portfolio: Starbucks Entertainment, EthosTM Water, Seattle’s Best Coffee,

Tazo® Tea.

Example from the Internet:

Learning organizations that has developed the capacity to continuously learn adapt and
change. In Starbucks black apron displaying the little and quot; are worn by employees who
have completed the coffee master course, which shows that Starbucks conducts many
programs to enhance the knowledge of workers. This implies mostly to middle level
managers as they are ones who are responsible for meeting the goals set by top level
managers by managing the workplace which includes enhancing their learning and
knowledge.

4.0 Top Managers

4.1 Definition:

At the upper levels of the organization are the top managers, who are responsible for
making organization wide decisions and establishing the plans and goals that affect the
entire organization.

Textbook 1: Top managers are at the top of the hierarchical level and are responsible for
the entire organization.

(DAFT:2017)

Textbook 2: Top managers establish organizational goals, such as which goods and
services the company should produce; they decide how the different departments should
interact; and they monitor how well middle managers in each department use resources to
achieve goals.

(George & Jones: 9th edition )

Textbook 3: Top managers make long-term decisions about the overall direction of the
organization and establish the objectives, policies, and strategies for it

(Kinicki &Williams: 2015)

Example from the Case Study: (Robbins 2016)

 With more than 19 000 stores in 62 countries, Starbucks is the world’s number one
specialty coffee retailer. The company also owns Seattle’s Best Coffee, Teavana, Tazo,
Starbucks VIA, Starbucks Refreshers, Evolution Fresh, la Boulange, and Verismo
brands.

 “We aren't in the coffee business, serving people. We’re in the people business, serving
coffee.” That’s the philosophy of Howard Schultz, chairman and chief global strategist
of Starbucks.

 Howard Schultz is the chairman, president, and CEO of Starbucks. Some of the other
“interesting” executive positions include chief operating officer, global chief
marketing officer; chief creative officer, executive vice president of partner resources
and chief community officer, executive vice president, global supply chain; executive
vice president, global coffee;learning business partner; and international partner
resource coordinate.

Example from the Internet:

Nowadays, competition is very fierce and strong, businesses have become more
competitive. So in order to survive in this competitive environment, the manager should
have entrepreneurship skills. These skills include looking for opportunities, innovation and
growth.

Due to these skills, Starbucks has excelled and reached to the height of success.
Starbucks focused on growth in example, the reason they have been able to expend to 11
000 outlets in 36 countries. They also introduced many innovations in their product line. It
is mostly implicated by top managers as they are the ones who make major business
decisions. Top-managers must make serious decisions in such situation to make their
company successful.

Suggestion and Recommendation

The first way that managers’ jobs are changing is in terms of how important customers
are to manager’s job. Because Starbucks’ success is a direct result of how it interacts with
its customers, this is critical. In fact, “customers” is one of the company’s six key corporate
principles. There are critical implications for first-line managers in how customer
connections are created and maintained as front-line partners serve and interact with each
and every customer encounter. For middle managers, the implications would lie more in
ensuring that the resources and support are available for first-line managers in creating
exceptional customer experiences. And for top managers, the implications would be on
reinforcing the corporate principles and establishing a reward system that recognizes and
celebrates those partners who exemplify outstanding customer engagement.

The second way that a manager’s job is changing is in the increasing importance of
innovation. Starbucks Corporation, like many companies, faced critical challenges during
the extended economic downturn. However, the executive team responded with a
full-fledged change effort that encompassed the company from top to bottom. “Doing thing
differently” was a key driver of those change efforts. For all levels of management, the
implications were profound… ranging from being more disciplined and efficient in the
operations side of the business to re-focusing on the long-term future of the company.

The third way that a manager’s job is changing is in how important sustainable practices
are to how a company does business. Sustainability is in the DNA of Starbucks. From the
beginning, the company has been about doing business ethically and responsibly. This
commitment can be seen in the way the company sources its all-important coffee beans to
the way it wants to be a “good neighbor” in the communities it serves. Managers at all
levels of the company need to understand the obligations associated with doing business
sustainability and recognize that they are accountable for how sustainability is practiced
and lived.
 Summary

This question wanted 3 current trends and issues facing by Starbucks manager and
explain how and what is the impact and implication to the first-line managers, middle
managers, and top managers. The first way that managers’ jobs are changing is in terms of
how important customers are to manager’s job. Because Starbucks’ success is a direct result
of how it interacts with its customers, this is critical. The second way that a manager’s job is
changing is in the increasing importance of innovation. The third way that a manager’s job
is changing is in how important sustainable practices are to how a company does business.
Managers at all levels of the company need to understand the obligations associated with
doing business sustainability and recognize that they are accountable for how sustainability
is practiced and lived.

P1-3 Choose three of the current trends and issues facing managers and explain how Starbucks
might be impacted. What might be the implications for first-line managers? Middle
managers? Top managers?

At the lowest level of management, first-line (or frontline) managers the work of
nonmanagerial employees who typically are involved with producing the organization’s
product or servicing the organization’s customers. Info from the case study is at the end
of 2013, the company had more than 200 000 full- and part-time partners (employees)
around the world. For example a workforce that heterogeneous in terms of gender, race,
ethnicity, age and other characteristics that reflects differences. Starbucks operates in
many countries, therefore it consists of diverse workforce. So as a manager it is necessary
to be well-acquainted with the diverse backgrounds of individuals in order to manage its
workforce effectively. It is most applicable for the first line managers because they are the
ones who are in direct contact with employees

Middle managers manage the work of first-line managers and can be found between
the lowest and top levels of the organization. Info from the case study is Starbucks’ main
product is coffee-- more than 30 blends and single-origin coffees. In addition to
fresh-brewed coffee, here’s a sampling of other products the company also offer

 Handcrafted beverages: Hot and iced espresso beverages, coffee and noncoffee
blended beverages, Tazo® teas, and smoothies.

 Merchandise: Home espresso machines, coffee brewers and grinders, premium

chocolates, coffee mugs and coffee accessories, compact discs, and other assorted
items

 Fresh food: Baked pastries, sandwiches, salads, hot breakfast items, and yogurt
parfaits.

 Global consumer products: Starbucks Frappuccino® coffee drinks, Starbucks Iced

Coffee drinks, Starbucks Liqueurs, and a line of super-premium ice creams

 Starbucks card and My Starbucks Rewards® program: A reloadable stored-value

card and a consumer rewards program.

 Brand portfolio: Starbucks Entertainment, EthosTM Water, Seattle’s Best Coffee,

Tazo® Tea.

For instance, learning organizations that has developed the capacity to continuously
learn adapt and change. In Starbucks black apron displaying the little and quot; are worn
by employees who have completed the coffee master course, which shows that Starbucks
conducts many programs to enhance the knowledge of workers. This implies mostly to
middle level managers as they are ones who are responsible for meeting the goals set by
top level managers by managing the workplace which includes enhancing their learning
and knowledge. Info from case studies are at the upper levels of the organization are the
top managers, who are responsible for making organization wide decisions and
establishing the plans and goals that affect the entire organization. With more than 19 000
stores in 62 countries, Starbucks is the world’s number one specialty coffee retailer. The
company also owns Seattle’s Best Coffee, Teavana, Tazo, Starbucks VIA, Starbucks
Refreshers, Evolution Fresh, la Boulange, and Verismo brands. “We aren't in the coffee
business, serving people. We’re in the people business, serving coffee.” That’s the
philosophy of Howard Schultz, chairman and chief global strategist of Starbucks.Howard
Schultz is the chairman, president, and CEO of Starbucks. Some of the other “interesting”
executive positions include chief operating officer, global chief marketing officer; chief
creative officer, executive vice president of partner resources and chief community
officer, executive vice president, global supply chain; executive vice president, global
coffee;learning business partner; and international partner resource coordinate.

Nowadays, competition is very fierce and strong, businesses have become more
competitive. So in order to survive in this competitive environment, the manager should
have entrepreneurship skills. These skills include looking for opportunities, innovation
and growth.

Due to these skills, Starbucks has excelled and reached to the height of success.
Starbucks focused on growth in example, the reason they have been able to expend to 11
000 outlets in 36 countries. They also introduced many innovations in their product line. It
is mostly implicated by top managers as they are the ones who make major business
decisions. Top-managers must make serious decisions in such situation to make their
company successful.

The first way that managers’ jobs are changing is in terms of how important customers
are to manager’s job. Because Starbucks’ success is a direct result of how it interacts with
its customers, this is critical. In fact, “customers” is one of the company’s six key
corporate principles. There are critical implications for first-line managers in how
customer connections are created and maintained as front-line partners serve and interact
with each and every customer encounter. For middle managers, the implications would lie
more in ensuring that the resources and support are available for first-line managers in
creating exceptional customer experiences. And for top managers, the implications would
be on reinforcing the corporate principles and establishing a reward system that
recognizes and celebrates those partners who exemplify outstanding customer
engagement.

The second way that a manager’s job is changing is in the increasing importance of
innovation. Starbucks Corporation, like many companies, faced critical challenges during
the extended economic downturn. However, the executive team responded with a
full-fledged change effort that encompassed the company from top to bottom. “Doing
thing differently” was a key driver of those change efforts. For all levels of management,
the implications were profound… ranging from being more disciplined and efficient in
the operations side of the business to re-focusing on the long-term future of the company.

The third way that a manager’s job is changing is in how important sustainable
practices are to how a company does business. Sustainability is in the DNA of Starbucks.
From the beginning, the company has been about doing business ethically and
responsibly. This commitment can be seen in the way the company sources its
all-important coffee beans to the way it wants to be a “good neighbor” in the communities
it serves. Managers at all levels of the company need to understand the obligations
associated with doing business sustainability and recognize that they are accountable for
how sustainability is practiced and lived.

Theory: from the textbook:

Levels of Management

1. Robert L. Katz found through his research that are classified into 3 levels (Exhibit
1-1) :
a. First-Line managers, at the lowest level of management, first-line (or frontline)
managers the work of nonmanagerial employees who typically are involved with
producing the organization’s product or servicing the organization’s customers.
b. Middle managers manage the work of first-line managers and can be found
between the lowest and top levels of the organization
c. Top managers, at the upper levels of the organization are the top managers, who
are responsible for making organization wide decisions and establishing the plans and
goals that affect the entire organization.

EXHIBIT 1-1
LEVELS OF MANAGEMENT

Insert theory from a minimum of 3 textbooks:

According to Daft, first-line managers are directly responsible for the production of
goods and services. They are responsible for teams and non-management employees.
Their primary concern is the application of rules and procedures to achieve efficient
production, provide technical assistance, and motivate subordinates. According to George
and Jones first-line managers is at the base of the managerial hierarchy are first-line
managers, often called supervisors. They are responsible for daily supervision of the
nonmanagerial employees, who perform the specific activities necessary to produce
goods and services. First-line managers work in all departments or functions of an
organization. Kinicki and Williams says that first-line managers make short-term
operating decisions, directing the daily tasks of nonmanagerial personnel, who are, of
course, all those people who work directly at their jobs but don’t oversee the work of
others.

According to Daft, middle managers at middle levels of the organization and are
responsible for business units and major departments.They are responsible for
implementing the overall strategies and policies defined by top managers. George and
Jones perspective view regarding middle managers is supervising the first-line managers
are middle managers, responsible for finding the best way to organize human and other
resources to achieve organizational goals. According to Kinicki and Williams middle
manager implement the policies plans of the top managers about them and supervise and
coordinate the activities of the first-line managers below them.

According to Daft, top managers are at the top of the hierarchical level and are
responsible for the entire organization. According to George and Jones, top managers
establish organizational goals, such as which goods and services the company should
produce; they decide how the different departments should interact; and they monitor how
well middle managers in each department use resources to achieve goals. According to
Kinicki and Williams, top managers make long-term decisions about the overall direction
of the organization and establish the objectives, policies, and strategies for it.

Insert info from the case study on Starbuck: (textbook)

At the end of 2013, the company had more than 200 000 full- and part-time partners
(employees) around the world.
Starbucks’ main product is coffee-- more than 30 blends and single-origin coffees. In
addition to fresh-brewed coffee, here’s a sampling of other products the company also
offer

 Handcrafted beverages: Hot and iced espresso beverages, coffee and noncoffee
blended beverages, Tazo® teas, and smoothies.

 Merchandise: Home espresso machines, coffee brewers and grinders, premium

chocolates, coffee mugs and coffee accessories, compact discs, and other assorted
items

 Fresh food: Baked pastries, sandwiches, salads, hot breakfast items, and yogurt
parfaits.
 Global consumer products: Starbucks Frappuccino® coffee drinks, Starbucks Iced
Coffee drinks, Starbucks Liqueurs, and a line of super-premium ice creams

 Starbucks card and My Starbucks Rewards® program: A reloadable stored-value

card and a consumer rewards program.

 Brand portfolio: Starbucks Entertainment, EthosTM Water, Seattle’s Best Coffee,

Tazo® Tea.

 With more than 19 000 stores in 62 countries, Starbucks is the world’s number one
specialty coffee retailer. The company also owns Seattle’s Best Coffee, Teavana,
Tazo, Starbucks VIA, Starbucks Refreshers, Evolution Fresh, la Boulange, and
Verismo brands.

 “We aren't in the coffee business, serving people. We’re in the people business,
serving coffee.” That’s the philosophy of Howard Schultz, chairman and chief global
strategist of Starbucks.

Howard Schultz is the chairman, president, and CEO of Starbucks. Some of the other
“interesting” executive positions include chief operating officer, global chief marketing
officer; chief creative officer, executive vice president of partner resources and chief
community officer, executive vice president, global supply chain; executive vice
president, global coffee;learning business partner; and international partner resource
coordinate.

Insert info from the internet on Starbucks:

A workforce that heterogeneous in terms of gender, race, ethnicity, age and other
characteristics that reflects differences. Starbucks operates in many countries, therefore it
consists of diverse workforce. So as a manager it is necessary to be well-acquainted with
the diverse backgrounds of individuals in order to manage its workforce effectively. It is
most applicable for the first line managers because they are the ones who are in direct
contact with employees.
Learning organizations that has developed the capacity to continuously learn adapt
and change. In Starbucks black apron displaying the little and quot; are worn by
employees who have completed the coffee master course, which shows that Starbucks
 conducts many programs to enhance the knowledge of workers. This implies mostly to
middle level managers as they are ones who are responsible for meeting the goals set by
top level managers by managing the workplace which includes enhancing their learning
and knowledge.
Nowadays, competition is very fierce and strong, businesses have become more
competitive. So in order to survive in this competitive environment, the manager should
have entrepreneurship skills. These skills include looking for opportunities, innovation
and growth. Due to these skills, Starbucks has excelled and reached to the height of
success. Starbucks focused on growth in example, the reason they have been able to
expend to 11 000 outlets in 36 countries. They also introduced many innovations in their
product line. It is mostly implicated by top managers as they are the ones who make major
business decisions. Top-managers must make serious decisions in such situation to make
their company successful.

P1-9 Give examples of decision that Starbucks managers might made under conditions of
certainty. Under conditions of risk. Under conditions of uncertainty.

1.0 Introduction:
 When making decisions, managers may face three different conditions: certainty, risk, and
uncertainty.

2.0 Under conditions of certainty

2.1 Definition:

The ideal situation for making decisions is one of certainty, a situation where a manager can
make accurate decisions because the outcome of every alternative is known.

Textbook 1: Certainty means that all the information the decision maker needs is fully
available. Managers have information on operating conditions, resource costs, or
constraints and each course of action and possible outcome.

(DAFT:2017)

Textbook 2: In a situation involving certainty, people are reasonably sure about what will
happen when they make a decision.

(Heinz Weihrich & Harold Koontz : 2012)

Textbook 3: If all the information needed is available, a decision may be made under a
condition of certainty.

(Gomez-Meija & Balkin & Cardy : 2015)

Example from the Case Study: (Robbins 2016)

About a year after joining the company, while on a business trip to Milan, Schultz walked
into an espresso bar and right away knew that this concept could be successful in the United
States. He said, “There was nothing like this in America. It was an emotional experience. I
believed intuitively we could do it. I felt it in my bones.” Schultz recognized that although
Starbucks treated coffee as produce, something to be bagged and sent home with the
groceries, the Italian coffee bars were more like an experience-- a warm, community
experience. That’s what Schultz wanted to recreate in the United States.

Example from the Internet:

 Perhaps, if Starbucks makes a financial investment that the company is certain will yield a
particular interest rate, it can be said that the company is making the investment under a
condition of certainty (concerning the return on their investment).

3.0 Under condition of risk

3.1 Definition:

A far more common situation is one of risk, conditions in which the decision maker is able
to estimate the likelihood of certain outcomes.

Textbook 1: Risk means that a decision has clear-cut goals and that good information is
available, but the future outcomes associated with each alternative are subject to chance.
However, enough information is available to allow the probability of a successful outcome
for each alternative to be estimated.

(DAFT:2017)

Textbook 2: Risk is present when managers know the possible outcomes of a particular
course of action and can assign probabilities to them.

(George & Jones: 9th edition )

Textbook 3: The degree of uncertainty about the outcome of a management decision is the
degree of risk.

(Gomez-Meija&Balkin&Cardy : 2015)

Example from the Case Study: (Robbins 2016)

In fact, his intention to restore quality control led him to a decision to close all (at that time)
7 100 U.S. stores for one evening to refrain 135 000 baristas on the coffee experience…
what it meant, what it was. It was a bold decision, and one that many “experts” felt would
be a public relations and financial disaster. But Schultz felt doing so was absolutely
 necessary to revive and reenergize Starbucks.

Example from the Internet:

Although Starbucks has already experienced success in these areas, the company is
uncertain about how their customers will perceive future expansion of product lines.

4.0 Under conditions of uncertainty

4.1 Definition:

Managers face decision-making situations of uncertainty. Under these conditions, the

choice of alternatives is influenced by the limited amount of available information and by
the psychological orientation of the decision maker.

Textbook 1: Uncertainty means that managers know which goals they wish to achieve, but
information about alternatives and future events is incomplete. Managers may have to
make assumptions from which to forge the decision even though it will be wrong if the
assumptions are incorrect.

(DAFT:2017)

Textbook 2: When uncertainty exists, the probabilities of alternatives outcomes cannot be

determined and future outcomes are unknown.

(George & Jones: 9th edition )

Textbook 3: Uncertainty means that incomplete information is available to make a

management decisions.

(Gomez-Meija&Balkin&Cardy : 2015)

Example from the Case Study: (Robbins 2016)

Another controversial decision was to hold a leadership conference with all store managers
(some 8 000 of them) and 2 000 other partners--all at one time and all in one location. Why?
To energize and galvanize these employees around what Starbucks stands for and what
needed to be done for the company to survive and prosper. Schultz was unsure about how
Wall Street would react to the cost, which was around $30 million total (airfare, meals,
hotels, etc.), but again he didn’t care because he felt doing so was absolutely necessary
and critical. And rather than gathering together in Seattle, where Starbucks is
headquartered. Schultz chose New Orleans as the site for the conference. Here was a city
still recovering from Hurricane Katrina, which had totally devastated it five years earlier
in 2005. Talk about a logistical nightmare-and it was. But, the decisions was a symbolic
choice. New Orleans was in the process of rebuilding itself and could succeed, too.

Example from the Internet:

As far as conditions of uncertainty, the coffee-bean farm venture in China might be an

example since the political and cultural constraints are unpredictable.

Suggestion and Recommendation

Only rarely, if ever, do managers have the luxury of making a decision under conditions
of certainty. Most managerial decisions must be made without the benefit of having all
pertinent information fully available.

When Starbucks decides to expand its successful strategic initiatives, such as its
ventures into new products extensions, the company is making decisions under conditions
of risk.

As the case study relates, Starbucks has experienced some strategic failures.

Summary

The question is all about under conditions of certainty, risk, and uncertainty. The question
wanted the examples of decisions taken under the condition of certainty, risk and
uncertainty. The examples must be related to Starbucks.
P1-9 Give examples of decision that Starbucks managers might made under conditions of
certainty. Under conditions of risk. Under conditions of uncertainty.

Only rarely, if ever, do managers have the luxury of making decision under
conditions of certainty. Most managerial decisions must be made without the benefit of
having all pertinent information fully available. Perhaps, if Starbucks makes a financial
investment that the company is certain will yield a particular interest rate, it can be said
that the company is making the investment decision under a condition of certainty
(concerning the return on their investment).
 When Starbucks decides to expand its successful strategic initiatives, such as its
ventures into new product extensions, the company is making decisions under
conditions of risk. Although Starbucks has already experienced success in these areas,
the company is uncertain about how their customers will perceive future expansion of
product lines. As the case study relates, Starbucks has experienced some strategic
failures. As far as conditions of uncertainty, the coffee-bean farm venture in China
might be an example since the political and cultural constraints are unpredictable.
Theory: from the textbook:

Decisions-Making Conditions
When making decisions, managers may face three different conditions: certainty, risk,
and uncertainty.
1. Robert L. Katz found through his research that managers may face three different
conditions certainty, risk and uncertainty.
a. Certainty the ideal situation for making decisions is one of certainty, a situation
where a manager can make accurate decisions because the outcome of every alternative is
known.

b. Risk a far more common situation is one of risk, conditions in which the decision
maker is able to estimate the likelihood of certain outcomes.

c. Uncertainty managers face decision-making situations of uncertainty. Under these

conditions, the choice of alternatives is influenced by the limited amount of available
information and by the psychological orientation of the decision maker.

Insert theory from a minimum of 3 textbooks:

According to Daft, certainty means that all the information the decision maker needs
is fully available. Managers have information on operating conditions, resource costs, or
constraints and each course of action and possible outcome. Based on Heinz Weihrich and
Harold Koontz, certainty means in a situation involving certainty, people are reasonably
sure about what will happen when they make a decision. Based on Gomez-Meija, Balkin
and Cardy if all the information needed is available, a decision may be made under a
condition of certainty.
 According to Daft, risk means that a decision has clear-cut goals and that good
information is available, but the future outcomes associated with each alternative are
subject to chance. However, enough information is available to allow the probability of a
successful outcome for each alternative to be estimated. George and Jones said that risk is
present when managers know the possible outcomes of a particular course of action and
can assign probabilities to them. According to Gomez-Meija, Balkin and Cardy, the
degree of uncertainty about the outcome of a management decision is the degree of risk.

Based on Daft uncertainty means that managers know which goals they wish to
achieve, but information about alternatives and future events is incomplete. Managers
may have to make assumptions from which to forge the decision even though it will be
wrong if the assumptions are incorrect. According to George and Jones, when uncertainty
exists, the probabilities of alternatives outcomes cannot be determined and future
outcomes are unknown. Based on Gomez-Meija, Balkin and Cardy uncertainty means that
incomplete information is available to make a management decisions.

Insert info from the case study on Starbuck: (textbook)

About a year after joining the company, while on a business trip to Milan, Schultz
walked into an espresso bar and right away knew that this concept could be successful in
the United States. He said, “There was nothing like this in America. It was an emotional
experience. I believed intuitively we could do it. I felt it in my bones.” Schultz
recognized that although Starbucks treated coffee as produce, something to be bagged
and sent home with the groceries, the Italian coffee bars were more like an experience--
a warm, community experience. That’s what Schultz wanted to recreate in the United
States.
In fact, his intention to restore quality control led him to a decision to close all (at that
time) 7 100 U.S. stores for one evening to refrain 135 000 baristas on the coffee
experience… what it meant, what it was. It was a bold decision, and one that many
“experts” felt would be a public relations and financial disaster. But Schultz felt doing
so was absolutely necessary to revive and reenergize Starbucks.
Another controversial decision was to hold a leadership conference with all store
managers (some 8 000 of them) and 2 000 other partners--all at one time and all in one
location. Why? To energize and galvanize these employees around what Starbucks
stands for and what needed to be done for the company to survive and prosper. Schultz
was unsure about how Wall Street would react to the cost, which was around $30
million total (airfare, meals, hotels, etc.), but again he didn’t care because he felt doing
so was absolutely necessary and critical. And rather than gathering together in Seattle,
where Starbucks is headquartered. Schultz chose New Orleans as the site for the
conference. Here was a city still recovering from Hurricane Katrina, which had totally
devastated it five years earlier in 2005. Talk about a logistical nightmare-and it was. But,
the decisions was a symbolic choice. New Orleans was in the process of rebuilding itself
and could succeed, too.

Insert info from the internet on Starbucks:

Perhaps, if Starbucks makes a financial investment that the company is certain will
yield a particular interest rate, it can be said that the company is making the investment
under a condition of certainty (concerning the return on their investment).

Although Starbucks has already experienced success in these areas, the company is
uncertain about how their customers will perceive future expansion of product lines.

As far as conditions of uncertainty, the coffee-bean farm venture in China might be an

example since the political and cultural constraints are unpredictable.