Organizational Behavior Analysis of Starbucks

Group Members:

Lingjun Bao (104519044) Huilin Gao (104483550)

Xiaokai Deng (104584350) Juzhou Zhang (104557945)
Ayesha Julka (104491683) Asaduzzaman (104524950)

Course: Managing Employees - 78-613-01

Instructor: Dr. Zhenzhong Ma
Date: December 1st, 2016
 Content
Abstract........................................................................................................................................................ 3

Company overview...................................................................................................................................... 4

An Analysis of the issues faced by Starbucks and their recommended solution. .................................. 4

Problem 1: Counterproductive work behavior ........................................................................................ 4

Analysis: Employees may lack teamwork spirit .............................................................................. 5

Recommendation 1: Improve the awareness of group cohesiveness ............................................. 5

Recommendation 2: Let employees know their roles in the group ................................................ 5

Analysis: Employees may suffer a lower motivation....................................................................... 5

Recommendation 1: Money as a motivator ..................................................................................... 6

Recommendation 2: Flexible work arrangements as motivator .................................................... 6

Problem 2: Low Wage and Employee Dissatisfaction ............................................................................. 6

Analysis: Low wages cannot satisfy employees’ needs.................................................................... 6

Recommendation: Merit Pay Plans .................................................................................................. 6

Analysis: Unstable working schedule cause job dissatisfaction ..................................................... 7

Recommendation: Stable working schedule .................................................................................... 7

Problem 3: Complicates supply chain and employee training ................................................................ 7

Analysis: ‘Playbook’ model introduced ........................................................................................... 7

Analysis: Employees communication gap ........................................................................................ 8

Recommendation: Allot specific attendant for taking order .......................................................... 8

Analysis: Relationship with customers are disappeared ................................................................ 8

Recommendation: Build customer relationship .............................................................................. 8

Conclusion ................................................................................................................................................... 8

References .................................................................................................................................................... 9

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 Abstract

Nowadays, organizational behaviors have become a crucial subject in institutions, organizations

and corporations because it can indicate that labors and managers how can they work better in
the company or manage the department effectively. As for this report, three different issues
which are facing in the Starbucks have been analyzed from concepts of the organizational
behaviors aspects, and also give the relative recommendations for those three issues in detail. A
significant issue is faced by the Starbucks which is the counterproductive work behavior. During
this issue, there are two analyses. one is employees may suffer a lower motivation, and its
recommendations are money as motivator and flexible work arrangements as motivator. Another
one is employees may lack teamwork spirit, and its recommendations are awareness of group
cohesiveness and employees' roles in the group. Besides, another vital issue has been found,
which is employees’ dissatisfaction of payment. It is analyzed from three aspects, which is low
wages, unstable working schedule and high turnover rate. In the report, increasing the welfare of
employees, creating stable working environment and improving the organizational culture will
be recommended for this issue. Finally, the third issue is complicated supply chain and
employee's training. The main causes are 'playbook' model introduced, employees’
communication gap and relationship with customers. There are certain of positive reinforcements
which have been realized and been mentioned in this report.

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 Company overview
The journey started in 1971, with a single store in Seattle’s Pike Place Market. Back then, from
just a narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean
coffees. Today, they are privileged to connect with millions of customers every day with
exceptional products and more than 24000 retail stores in 70 countries. Starbucks is named after
the first mate in Harman Melville’s Moby Dick. Their logo is also inspired by the sea- featuring
a twin-tailed siren from Greek mythology. the mission of Starbucks is to inspire and nurture the
human spirit-one person, one cup and one neighborhood at a time. Therefore, Starbucks have
22519 stores where offers a range of exceptional products that customers enjoy in the stores, at
home, and on the go. They’ve always believed in serving the best coffee possible. It’s their goal
for all of their coffee to be grown under the highest standards of quality, using ethical sourcing
practices. Moreover, Starbucks have more than 30 blends and single-origin premium coffees
along with 7 different flavored Handcrafted Beverages and fresh foods. Starbucks also provides
their coffee and tea as consumer products for instance Whole bean and ground coffee (Starbucks
and Seattle’s Best Coffee brands), Starbucks VIA Instant, Starbucks Coffee K-Cup pods and so
on. furthermore, Starbucks added ready drink in their beverage list for their valuable customer.
As a responsible company, Starbucks always believe in the importance of building a great,
enduring company that strikes a balance between profitability and a social conscience. In 2016,
Starbucks got honor from The World’s Most Ethical Companies program that excel in three
areas – promoting ethical business standards and practices internally, enabling managers and
employees to make good choices, and shaping future industry standards by introducing
tomorrow’s best practices today. moreover, Starbucks share their customer’s commitment to the
environment with fostering thriving communities.

An Analysis of the issues faced by Starbucks and their recommended solution.

Starbucks owes its success to its employees. Their employees are treated like partners, and their
customers like stars. The payoff is what the Starbucks brand name means to consumers. but, still
Starbucks is facing challenges about their employee dissatisfaction and lack of customer
involvement. As Starbucks have their valuable customers, shareholders, retail partners; and
Starbucks is responsible to provide them the best. So, it is fair to say that the analysis of the
issues concerning a renowned coffee brand company involve, not only a study of its economics,
but more importantly, a study of the human relations and organizational behavior within the
organization.
In the following report, we have discussed the main issues that Starbucks is currently facing,
their analysis in the context of organizational behavior and our recommendations to resolve these
issues. the information provided is secondary data from company’s official websites, various
case study on this company and also some employees interview collected by from internet.

Problem 1: Counterproductive work behavior

The most important issue that the Starbucks is facing, which is counterproductive work behavior.
There were two previous employees from the Starbucks. Their name are Sara Vilchis and Susana

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Alatorre. Susana said that "Some employees will talk to other employees or other customers and
not pay attention to their job. Some will spend their time doing other tasks that are unnecessary
at the time, which makes others work harder to get orders completed"(Mercado, 2014). At the
same time, Sara mentioned her point that "misuse of time is a big issue like not doing the most
helpful task at a busy time so that they put more pressure on everyone else"(Mercado, 2014).
Those two statements which be found in the Internet. That is to say, counterproductive work
behavior is really exist, especially in the working effort.
Analysis: Employees may lack teamwork spirit
A company is a big group so everyone in there need to cooperate with each other to achieve their
common goal. These employees who just like the persons Susana said are lack of teamwork
spirit. They do not realize that if they do not complete their own tasks, they will affect the whole
team. The one reason lead to this situation is that the employees do not have enough awareness
of group cohesiveness. Employees who do not have enough awareness of group cohesiveness
may do not think that their behaviors may bring some negative influences to others. Because of
their neglect, other employees need to do more work to offset their fault. Another reason is that
the employees may not know what “member role” they are. Roles are positions in a group that
have a set of expected behaviors attached to them. Everyone in a group plays different roles, so if
one member do not know his or her role, then the group will not work concertedly. Consequently,
the teamwork spirit is very important for the modern business group.
Recommendation 1: Improve the awareness of group cohesiveness
Regarding to the teamwork spirit in the Starbucks, the manager should do something to improve
the employees’ group cohesiveness. Firstly, the manager should organize some activities which
need to participate with others. By participating these activities, employees may improve their
abilities about cooperation. Secondly, the successful goal accomplishment contributes to group
cohesiveness. Company should join in some competitive contest and then win it.
Recommendation 2: Let employees know their roles in the group
Manager need to separate work clearly to make every employee knows what they should do.
Every employee in a group likes a part of machine, only when all of them operate normally and
work consistently, the machine can make the great effectiveness. Moreover, the manager need to
provide some training to help employees understand what their main tasks are and let them know
the importance about their own position. In this way, employees can realize that they are one of
the members in the group, so their behaviors can make an important effect on group.
Analysis: Employees may suffer a lower motivation
According to the informal survey from the Internet, it clearly shows that employees who work in
the Starbucks are may suffering lower motivation. It is obvious that there is not any motivator to
encourage those employees through this phenomenon. Workers are not seem like a machine or
assembly line which do not has emotion. However, "labors who are all human being so that they
need some motivators to drive them to do something in order to achieve something"("Starbucks
corporation case study in motivation and teamwork," 2015). Therefore, motivation cannot be
underestimated in current business situation.

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Recommendation 1: Money as a motivator
Considering about the motivation in the Starbucks and under those kind of circumstances, it is
recommended that the Starbucks needs to pay more attention to payment as a motivator.
Probably payment is not the only factor that can influence the motivation of employees; however,
it is a vital factor to impact workers' motivation. What do those people do will really impact
productivity of the whole company and satisfaction of customers because they will rub elbows
with customers. Therefore, going back to the lower motivation issue, the higher salary will raise
the motivation of labors.
Recommendation 2: Flexible work arrangements as motivator
What's more, there is another recommendation. The employment, such as the barista, the chef,
and food and beverage manager in the coffee shop, can use flexible work arrangements as
motivator. Employees can use flex-time when the manager arranges the next week working
schedule.
Problem 2: Low Wage and Employee Dissatisfaction
In 2014, Navarro, a single mom who works at Starbucks in a big city. Her life is in constant
chaos because of the erratic work schedule in Starbucks and she earn a precious $9 an hour at
Starbucks. This is a very low wage for a people who lives in a big city. The standard wage in
America was around 8.5 in 2014. Obviously, Navarro earned a low wage which very close to the
standard wage with unstable work schedule. In 2015, Starbucks decide to raise the hourly rate.
But the problem was even more serious because they conduct the work hours to keep the total
profits. Employees’ morale and customer service were hurt by Suddenly Starbucks' eagerness to
raise its wages and reduce work hours. The low wage of Starbucks is not just showed in the past
years. Starbucks official website stated that the wages of baristas in 2016 are improved to 10
approximately but still in a low level. We all know that they cannot earn too much tips from
Starbucks because the business model of it is unlike the usual restaurant.
Analysis: Low wages cannot satisfy employees’ needs
According to Maslow’s need theory, there are five-level needs. Maslow’s theory stated that
people have needs which is a lack of something or something people want. To satisfy the desires
can directly influence employees’ behavior. Pay as a significant motivator has strongly positive
impact on motivating employees because pay can satisfy people’s basic survival needs as well as
social, self-esteem, and self-actualization needs. To be specifically, money provides the
employees’ food and shelter, gives a security feeling and affects their social status and
interpersonal relationships. So, low wages could cause a lot of negative influences to employees.
They will have a bad working performance and the negative attitude.
Recommendation: Merit Pay Plans
Money as a motivator improve the minimum wage to meet different needs for different type of
work especially for the baristas and cashiers. They deserve a fair salary instead of the exist
minimum salary because they don’t have too much tips and they are usually busy in the daily
work. Also, to control the cost of wages improvement, Starbucks should linking pay to

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performance and introduce merit pay plans. This approach has several potential problems if
employers do not manage them carefully. So, the employers should pay more attention on the
employee's performance and the growth rate of wages. An effective performance rating system is
needed for the employers to distinguish good performance and bad performance. In Addition,
Starbucks could build a Customer Recognition Programs which could get the feedback from
customer to award the good performance employees. This Programs may include any
combination of recognition elements about the customers’ feedback about the taste of drinks and
food, the attitude, and the speed to serve customers.
Analysis: Unstable working schedule cause job dissatisfaction
Working conditions could satisfy employees’ physical and safety needs which is stable income
and steady life-timetable. It also meets the belongingness and esteem needs that the stable
working environment could make employees feel more security and belonging of work and more
efficient interaction with colleagues. Distributive fairness theory stated that employees want
fairness and equity, they think they should receive the outcomes which equal to their
contribution of job. Once they cannot get the fairness treatment, employees may feel frustration
and dramatically decrease their job satisfaction that can lead to the absenteeism and turnover.
Recommendation: Stable working schedule
Starbucks wants to provide a great customer experience which means they need outstanding
customer service. To improve their employees’ job satisfaction is the effective way to enhance
the quality of customer service. Starbucks should provide more flexible and appropriate working
schedules which could allow them decide their working pace. Starbucks should guarantee stable
working hours because Starbucks pay the employees by hours, to make sure the employees have
enough time to work is another way to guarantee their income. Starbuck also could compress
workweek. To prolong everyday working hours and short working days that provide more
flexibility and convenience to employees.
Problem 3: Complicates supply chain and employee training
The third problem we found that Starbucks is adding several layers of complication to its supply
chain and employee training just by introducing ‘La Boulange’ to more than 3,500 stores which
is a very complex rollout. By expanding Boulange bakery, workers are stressed out because they
had to transit to the new model which requires every pastry be served hot. for this new item,
employees have no experience about to make it and serve it at the same time.so, they are
suffering with the schedule of making foods and serving at the same time and got panicked
themselves.
Analysis: ‘Playbook’ model introduced
Starbucks were introduced new food item in their menu list which requires to serve immediately
after making the food. And so, employees are assigned for one specific task that they repeat over
and over during their shift.

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Recommendation: Implement Employees training

As company introduced new product with new model, they should implement an employee
training session for their employees so that they can develop their skill about to know the product,
making and serving.
Analysis: Employees communication gap
It is difficult to deliver an order that includes both food and beverages when the store is designed
to sell coffee. Therefore, Starbucks are facing miscommunication problem between employees
preparing food and those preparing beverages led to incorrect orders or orders not being filled at
all. According to former barista (2014), he said that A lot of orders are going wrong because the
person preparing the pastries isn't communicating with the person serving the coffee. sometimes,
the order just gets lost.
Recommendation: Allotment of specific attendant for taking order
It is an attempt to overcome this situation, Starbucks management should keep specific 2/3
employees for taking order only so that the order would not be missed or misplaced.
Analysis: Relationship with customers are disappeared
This new method had a reasonable effect on interaction with customers. It goes against
Starbucks' roots as a place with great customer service. Instead of simply being a coffee shop,
Starbucks is trying to be everything for everyone which makes The relationships with customers
have sort of disappeared.
Recommendation: Building customer relationship
Build customer relationship. it is highly recommended that it is more important to do the things
in right way instead of doing fast. employee should take time when they serve foods to their
customers and try to build customer relationship.

Conclusion
It can be concluded that most of the issues faced by Starbucks stem from less than effective
management of human relations within the organization. The recommended course of action can
be narrowed down to three significant steps: motivate employees, distributive fairness and
adoption of the human relations approach. By and large, it is seen that the system in place within
the company is consistent with the classical approach to management. In this manner,
appropriate concepts and theories of Organizational Behavior can be used to eliminate the
problems faced by the company.

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