Starbucks Corporations Corporate Culture - Case Study Example

Starbucks Corporation By (Name) Institution Instructor Class/Course City Starbucks is the top selling coffee not only in America, but also in the world. Basing on its main strategy of expanding on its foreign market, the Starbuck’s management has embarked on widening its global opportunities in order to increase its brand awareness. From the initial levels, the company has been committed to ethically sourcing as well as roasting the best quality Arabica coffee in the world. With its many stores around the world, considering its chain, 16,120 stores in over 49 countries, over 10,000 stores in the United States, and many other outlets in the rest of the globe makes the company an international coffee powerhouse. The main products are the drip brewed coffee and expresso-based hot coffee drinks. Starbuck’s corporate culture The Starbuck’s corporate culture is based on the strategic orientations of diversity and customer focus, organizational structure, networking, organizational ethics, employee relations, as well as corporate citizenship. The basic understanding of the Starbuck’s management is that customers have different diversities that can only be met by making products range to satisfy their expectations. Normally for the company, repeat customers have included business professionals, healthcare professionals, and students among others. Starbucks strive to create a value and respect of diversity as well inclusion in order to integrate global reality of brand leadership. The restructuring aspect of the organization is based on the trends of global strategy, human resource management strategy, customer experience management, as well as marketing and brand strategic management. The tradition of teamwork that enjoys the working environment has enabled the innovated employees to offer the customers quick and quality services to their customers. Starbuck has over the years maintained an increasing rate of performance among employees. The company has done this by offering comprehensive benefits, offering enticing incentives, and inspiring enthusiasm. Starbuck believes that in order to create happy customers it must hire the right people. Management strategy Argued earlier, one of the major competitive advantage of the company is not only its quality production, but also based on its prompt customer services in such a highly competitive environment. Starbucks establishes comfortable surroundings for people to socialize with a fair price, which attracts all ages of consumers to come into the stores. Besides, it is also noted for its employee satisfaction (Griffin, 2011). According to Griffin (2011), the turnover rate of employees at Starbucks was 65% and the rate of managers was 25% a year However, the rates of other national chain retailers are 150% to 400% and 50% respectively. Compared with them, the turnover rate of Starbucks is much lower than other industries on average. As a result, Starbucks is one of the optimal business models for strategies of employee motivation, customer satisfaction and cooperation of teamwork. The main vision and objective of the company is to grow by making its employees feel valued. This approach has made the company to create more value even for the customers, since as argued by De Kluyver (2010), a motivated employee creates value for the customer. This strategy has made the company to be the best of its kind in the world. With better compensation as well as comprehensive benefits, the company believes that sharing the company’s success with the workers is critical in the company’s continued improvements and profitability. In order succeed in a production firm; motivation among workers is very critical. The management believes that the spirit of Starbucks is employees and feels appreciated about the value of the company’s employees. Starbucks offers an interactive structure that makes personnel throw themselves into their job. Using the following reasons, the company has highly progressed over the years. Equality The equality measure at Starbucks is not only felt by the management, but also even the employees. The gap between the management and the employees has been narrowed through good communication aspects and everyone feels involved in the affairs of the firm. Due to this, they can maintain a good management system and create a much closer and more familiar atmosphere than other places. Not only do employees enjoy their job but customers are also affected by their enthusiasm. Good Communication Starbucks has a comprehensively well-organized communication channel for workers. For example, managers plan the working hours per workers and arrange the schedule of time off, according to the workers’ wants in order to meet their requirements. There are interviews weekly to see what employees’ needs are. The partners have the right to figure out what is the best policy for them, and the directors show a respect for each suggestion. Starbucks even wants every employee to join in making and developing plans, then work together in achieving their goals. As a result, the policies and principles are communicated between all staff, and there is no limitation in employees’ personal opinions. Welfare All employees, including informal personnel, are offered a great deal of welfare policies, for instance, commodities discounts for employees, medical insurance (including health, vision and dental) and vacations. Moreover, the partners who work over 20 hours a week are entitled to benefits. Starbucks also thinks that debt financing is not the best choice, thus it chooses to allocate stock dividends to all employees with a free script issue. By this policy, the employees can get benefits from the dividends of the company (Williams, 2011). Because of this, they have the same goal; in other words, they are motivated to increase the sales to earn more profits. To Starbucks, the employees are the most important asset. Teamwork One of the key facts for success is teamwork in any firm. The company has a well established relationship among different stakeholders of the firm. When employees are treated as partner, the self involvement with the firm tends to grow more than usual, and the level of bureaucracy reduces. Complements and issues raised by fellow workers are treated with equal measures and with strict importance and all have a right to participate in the process of revising company policies. In that case, each staff member thinks that they also play an important role in company operating, and they jointly work out the direction of Starbucks. All this gives employees respect and a sense of participation. Public welfare A proper welfare with the public is fundamental for the image of the firm. Starbucks contributes part of its profits to public service. As a consequence staffs have an idea that what they do for Starbucks is for society as well. With regard to goals, Starbucks set a challenging and specific goal, and it allows all partners to decide the direction. Financial statement of Starbuck’s The following tables represent the financial statements of the Starbucks in terms of the yearly income statement, the yearly balance sheet and the financial ratios. Income statement for the period ending 2013 Fiscal year is October-September. All values USD millions. 2009 2010 2011 2012 2013 Sales/Revenue 9.78B 10.71B 11.7B 13.3B 14.89B Cost of Goods Sold (COGS) incl. D&A 8.54B 8.81B 9.54B 10.71B 11.72B COGS excluding D&A 7.98B 8.27B 8.99B 10.13B 11.06B Depreciation & Amortization Expense 563.3M 540.8M 550M 580.6M 655.6M Depreciation 561.6M 539.6M 547.8M 576.1M 647.9M Amortization of Intangibles 1.7M 1.2M 2.2M 4.5M 7.7M Gross Income 1.24B 1.89B 2.16B 2.59B 3.18B Balanced sheet of Starbucks for the period ending 2013 Currency in Millions of US Dollars Oct 03 2010 Oct 02 2011 Sep 30 2012 Sep 29 2013 Assets Cash and Equivalents 1,164.0 1,148.1 1,188.6 2,575.7 Short-Term Investments 236.5 902.6 848.4 658.1 Total Cash And Short Term Investments 1,449.7 2,050.7 2,037.0 3,233.8 Accounts Receivable 302.7 386.5 485.9 561.4 Total Receivables 302.7 386.5 485.9 561.4 Inventory 543.3 965.8 1,241.5 1,111.2 Prepaid Expenses 156.4 161.5 187.0 275.2 Deferred Tax Assets, Current 304.2 230.4 238.7 277.3 Total Current Assets 2,756.4 3,794.9 4,199.6 5,471.4 Gross Property Plant and Equipment 5,888.7 6,163.1 6,903.1 7,782.1 Accumulated Depreciation -3,472.2 -3,808.1 -4,244.2 -4,581.6 Net Property Plant And Equipment 2,416.5 2,355.0 2,658.9 3,200.5 Goodwill 262.4 321.6 399.1 862.9 Long-Term Investments 533.3 479.3 575.9 554.8 Other Intangibles 70.8 111.9 143.7 274.8 Other Long-Term Assets 151.2 141.4 144.7 185.3 Total Assets 6,385.9 7,360.4 8,219.2 11,516.7 Liabilities & Equity Accounts Payable 282.6 540.0 398.1 491.7 Accrued Expenses 961.2 850.7 1,005.8 1,127.0 Current Income Taxes Payable 24.7 109.2 138.3 125.0 Other Current Liabilities, Total 96.5 126.6 157.4 2,979.9 Unearned Revenue, Current 414.1 449.3 510.2 653.7 Total Current Liabilities 1,779.1 2,075.8 2,209.8 5,377.3 Long-Term Debt 549.4 549.5 549.6 1,299.4 Other Non-Current Liabilities 375.1 347.8 334.7 347.6 Total Liabilities 2,703.6 2,973.1 3,104.7 7,034.4 Common Stock 0.7 0.7 0.7 0.8 Retained Earnings 3,471.2 4,297.4 5,046.2 4,130.3 Total Common Equity 3,674.7 4,384.9 5,109.0 4,480.2 Total Equity 3,682.3 4,387.3 5,114.5 4,482.3 Total Liabilities And Equity 6,385.9 7,360.4 8,219.2 11,516.7 Starbucks changes the behaviors and viewpoints of global consumers of coffee, and this successful example has caught global attention. Nowadays, it is not only one of the fastest growing corporation, but also an outstanding business model with low employee turnover rate and high profit performance. Starbucks shows that motivation is the key factor of a company policy, opposite to the principles of classical management which is only concerned about production and ignores workers’ ideas. A good relationship between managers and employees could maintain a high quality of performance. References De Kluyver, C. A. 2010. Fundamentals of global strategy a business model approach. [New York, N.Y.] (222 East 46th Street, New York, NY 10017), Business Expert Press. http://site.ebrary.com/id/10409932. Griffin, R. W. 2011. Management. Mason, OH, South-Western Cengage Learning. Schultz, H., & Gordon, J. 2011. Onward: how Starbucks fought for its life without losing its soul. West Sussex [England], Wiley & Sons. Weil, R. L., & Maher, M. 2005. Handbook of cost management. Hoboken, N.J., Wiley. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=231721. Williams, C. 2011. Management. Mason, OH, South-Western Cengage Learning. Read More