Starbucks is the leading coffeeshop chain in the global market. Ever since its inception, the company has managed to expand its operations into 80 countries, across over 30,000 company-owned and licensed outlets. The massive global operation of the company over the past decades is supported by its robust organizational structure. In this article, we have presented a thorough discussion on the organizational structure of Starbucks, which highlights the hierarchical structure within the company and the its corporate governance. This can prove to be quite beneficial for your college essay on Starbucks, especially when you are conducting an internal audit.
The organizational structure of a firm determines how the certain activities like task allocation, employee coordination and supervision are directed in order to achieve organizational goals. The structure of an organization varies greatly from one company to another. The success of the firm depends on the harmony between the its structure, and internal culture and activities. Let us now look at how the organizational structure of Starbucks has helped the company to achieve its long-term success.
Starbucks follows a matrix organizational structure which is a combination of more than one structure, typically it is a consolidation of vertical and horizontal structures. In this type of organizations, there can be multiple overlapping chains of command. Thus, one employee may report to two different supervisors. Due to the overlapping nature of matrix structure, it can often become quite complex. However, for a global organization which operates in multiple geographic segments and with multiple product categories, the matrix organizational structure can be quite beneficial.
In case of Starbucks, the most crucial decisions of company relating to its global operations and governance are taken by the headquarter in Seattle. This allows the company to have a centralized control over its operations even though it has regional headquarters across the world. To write an essay on Starbucks organizational structure, you need to understand the underlying chain of command and business segmentation. The entire global business of the company is segregated into geographic and product segments. In terms of geographic segmentation, the entire operation can be divided into: the Americas; the Europe, the Middle East and Africa (EMEA); and China and Asia Pacific (CAP). Each of these three geographic segments contain respective markets, overseen by respective Presidents. The performance of each of these regions are reported to the Seattle headquarter. On the other hand, in terms of product segmentation, the business operations have been segregated into: Beverages; Food; Packaged and Single serve coffee and tea; and Others. Each of them is overseen by respective product managers.
A close look at the organizational structure of Starbucks reveals that the company follows a combination of localization and global standardization. The global standardization allows the company to ensure that its brand image and cultural practices are prevalent across all the host markets. It allows the company to take advantage of its global brand image to attract the customers in the international markets. Simultaneously, the company also follows localization in certain aspects of its business such as product development and marketing communication. While developing marketing strategy for a global company like Starbucks, you should understand that a localized approach to product development allows the company to cater to the needs of the customers more effectively. The same holds true for marketing communication. A localized promotional campaign becomes more relatable to the target audience in the host market, than a standardized promotion. Therefore, Starbucks ensures that the international regions are able to take certain decisions independently, which are specific to the given market. It is the responsibility of the regional managers to take the necessary decisions which can help the company to excel in the international markets.
In the matrix organizational structure of Starbucks, the employees report to both the product managers and the departmental managers. In this case, every local market has its own hierarchical matrix structure, where the operational activities are segregated into strategic functions such marketing, sales, HRM, legal, finance, etc. The employees report to the departmental head as well as the regional head. This overlapping of chain of command gives it the matrix structure. In Starbucks, the matrix organizational structure has allowed the firm to implement more refined control over the international operations. The matrix structure is only present in the top and middle management, however at store level the traditional vertical organizational structure is prevalent.At store level, each store is overseen by a store manager, who supervises shift managers. Each of these shift managers then supervises the baristas.
The organizational structure of Starbucks can be a bit too complex to comprehend. But it should be understood that for a globally operational company, with multiple business divisions, a traditional organizational structure may not be as effective. For this company, the matrix structure has proven to be beneficial as it aligns with the mission statement of Starbucks. Through this organizational structure, the company is able to maintain the global brand image surrounding social responsibility and it also enables them to take a localized approach to value creation for the stakeholders. By this time, you should have had a thorough understanding of the organizational structure of Starbucks and how the company operates with its overlapping chain of command. You should now be able to implement it in your own papers without any assignment help.
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