Managerial Organizational Change - Assignment Example

Name: Course: Tutor: Date: Part 1: Introduction The environment in which many organizations operate in, both internally and externally has continued to evolve and continued to increase pressure on the executives to come up with more adaptive ways that will ensure that they remain relevant in their respective industries. This is important in ensuring that both organizational and human systems which are very complex are aligned in such away that they can help the organization maximize on the investor’s value. Managing organizational change is especially important in making sure that the business has the capacity to adapt to various pressures that may have influence on its performance. Building organization capacity to deal with diverse changes both internally and externally is the ultimate goal of many organizations as they seek to attain their objectives. Regardless of the position of the organization in the industry some pressures are eminent and which force the managers to seek new ways of doing things so that can be relevant and remain in business. The sources for these pressures include change in environment, identification of deviations from the expected standards, need for new vision into the future and the nature of the organization itself. The work of the managers is to ensure stability of their organizations. Environmental pressures are related with decline performance as a result of decline in demand and sales caused by decline in the market share. In such situation the role of the management is to work on strategic decisions to turn around the company performance. Environmental pressures for change are categorized into six major types namely: management fashion change, outside mandated pressures, change in geopolitical relationships, declining markets, hypercompetition and pressure to build on company reputation and credibility. Purpose of this study The purpose of this assessment is to take a critical view on StarBucks coffee company and its White Mocha product and then identify those environmental forces that are pressuring the company to embark on orgnisational change and then explain how seven elements of The Cultural Web are relating to the company. The ultimate objective of doing this is to develop a recommendation that can be used by the management to undertake change. Company overview StarBucks coffee company was first established in 1971 as a single store at place called Seattle’s Pike Place Market in Washington. By then the company was operating just as a roaster and retailer of whole bean and grounded coffee as well as tea and spices. Today, the business is known to be connecting with millions of customers each day with exceptional products and very wide coverage of 18,000 retail stores operating in 60 countries globally. Starbuck has been named after the very first mate in Herman Melville’s Moby Dick. The company logo has been inspired by the sea-featuring of a twin-tailed siren of a Greek Mythology as shown in appendix one below. The company brand portfolio includes Starbucks Coffee, Tazo Tea, Evolution Fresh, Seattle’s Best Coffee and La Boulange as well as Torrefazione Italia Coffee. The company has always believed that it is always possible to serve the best coffee and its goal has been to ensure that coffee is grown under the highest quality standards and at the same time source for coffee using best practices. The company’s coffee buyers are known to travel to various coffee farms and plantations in the Latin America and Africa as well as Asia in order to ensure high quality beans are purchased (Starbuck 2012). Company mission The company mission and that has proved very fundamental in the company performance is “to inspire and nurture the human spirit-one person, one cup and one neighborhood at a time.” Starbuck as a responsible company As a company, paying attention to the importance of building a great and enduring company that ensures balance between its profitability and social conscience has been core of its operations. Under ethical sourcing, a holistic approach is being undertaken to highest quality coffee is purchased. This is achievable by practicing responsible buying behaviors and supporting farmers in terms of loans as well environmental conservation programs. The company is committed to environmental conservation especially in its goal to achieve 100% use of cups that are recyclable. Finally, the company stores are normally located near coffee producing areas as one way of involving the community and bringing change to the lives people who are major producers of coffee. Further, by 2015, the company is planning and hopes to have contributed one million hours to activities related to community development. This is to ensure that as the business continues to grow, the society also develops and as a result sustainability of the business (Starbuck 2012). White Chocolate Mocha This is one of the major products produced by the company. This product is especially preferred because of its elegant and creamy taste as shown in appendix 2 below. The product is common characterized by its smooth subtlety which has been its major complement in terms of flavor. The White Chocolate Mocha are bolder and in rich of full-bodied espresso. However, the product is more enjoyed and tasty when it’s taken in its delicious beverage form (Starbuck 2012). Part 2: Environmental forces for the company As mentioned earlier there are numerous environmental forces that can affect the company and which precipitate the need to undertake organizational change. However, some forces are specific to certain organizations and industries (Taylor-Bianco & Schermerhorn, 2006), In the case of Starbuck Coffee Company, the three forces are likely to affect it include mandated pressures, hypercompetition and need to maintain good corporate reputation and credibility. Mandated pressures Mandated pressures are environmental forces that are exerted on the company based on its practices and are aimed at treating all people equally without any element of discrimination. One such area that mandated pressure has been witnessed is on diversity management and more especially on the company policies and practices to discrimination. Several companies world over have been charge for practicing discriminating policies and practices and in particular those that deal with racism. Some of the companies that have been charged include Chevron Texaco, Shoney’s and Denny as well as Coca-Cola in 2000. Despite these companies being global companies and have continued to draw its workforce from various races, still they seem to apply its policies in a discriminatory manner. In such circumstances the mandated forces come into play when the affected parties seek legal address and assistance. Under such circumstances, the company is forced by the court to comply with best practices by having an overhaul on its practices and policies (Axelrod, 2000). Currently, Starbuck Coffee Company operates in 60 countries and has got 18,000 retail stores which are located in these countries (Starbuck 2012). As a matter of fact, one biggest challenge that the company must be facing right now is how to deal with diversity since it is workforce is drawn from different races and cultural background. In this case, orgnisational change management is considered very necessary in order to accommodate each race within its workforce and its contribution into the overall performance of the company (Balogun & Johnson, 2000). The need to undertake organization change therefore, is to ensure that its staff undergoes proper diversity training courses and that managers are trained and prepared to work with and handle people from all races in the most fair way possible. At Starbuck, it is very vital to recognize the importance of ensuring equity in recruiting, retaining and promoting its workforce. Complying with this requirement in the company is the fundamental cause for change in the organization. Hypercompetition forces Hypercompetition comes into play when an organization which over some time has enjoyed monopoly or rather small competition in the industry experience some fierce from new and well strategized companies. Hypercompetition therefore is common when one firm experiences some rivalry with another company that operates in the same industry and that is likely to influence on its sales (Ian et al, 2009). In the world of business, various companies have either collapsed or force to consider change in order to survive in the industry so as to deal with the force exerted to the business as a result of advanced competition (Eisenhardt, 2000). One such company that has faced very stiff competition from the rival is Gateway which is a personal computer manufacturing and selling company. The company started facing very fierce competition from Dell which is a rival in direct-sales in 1998. Noting that the company was headed for collapse, Gateway founder and also by then the CEO, Ted Waitt was forced to undertake a comprehensive organizational change to the company which show hiring of 10 new executives, and also change in the way of doing business. The changes also affected the company name, product bases, building of alliances and business strategy. These changes were a clear demonstration of what effect hypercompetition can have to the business (Ian et al 2009). In the case of Starbuck, increased competition is one such environmental force that is pressing on the company to consider change (Leana & Barry, 2000). This is because there are numerous retailers who are also operating in the industry who may be using similar business strategy like New World Coffee and Timothy’s and also because of lack of experience in operating in markets where pricing is very extensive. To defend itself from such competition, organizational change is required by Starbuck to ensure sustainability of its brand (Lu¨ scher et al, 2006) Hypercompetition for Starbuck can be force for organizational change in order to allow building of alliances with such companies as Dreyer’s Grand Ice Cream, Barnes and Noble Booksellers and Pepsi-co as well as Nordstrom as one way of expanding its distribution base. All these changes at Starbuck are as a result of hypercompetition by rivals. Maintaining corporate reputation and credibility Corporate reputation is explained as the stakeholder perception towards the organization’s management practices and is more founded on governance and leadership. Reputation pressure can be instant and happen within a very short-term. Corporate reputation with who sits in the board of directors how is their reputation like. Quality services and products is also another aspect where reputation can be built from (Kotter and Dan, 2006). Reputation can also be as result of the process of managing various interests by the stakeholders. In the case of Starbuck which is the leading global coffee restaurant, the major issue is how to involve various stakeholders and at the same time ensure that the business is profitable. However, with organizational change, flexibility is always possible and management can always be reorganized to fit in various contexts and also to ensure quality of their White Mocha remains at the top. Part 3: Seven elements of The Cultural Web Model The Cultural Web establishes six interrelated elements which are important in making up what is called a “paradigm” according to Johnson and Scholes which is a pattern of the work environment (Gustavsen, 2000). By analyzing each of these elements individually it is easy to tell what the culture of the organization and what is working and not working and that need to be changed. The six elements of the Cultural Web include stories, rituals and routines, symbols, organizational structure, control systems and power structures as shown in the model below. Source: Ian et al 2009 Stories The stories as depicted in the Model, is an element that is used to ascertain what people talk about the company both from inside and outside (Ian et al 2009). This is more especially with the behavior in the company and what the consumers perceive about it (Balogun & Johnson, 2000). Starbuck Coffee Company however, has been at the top of discussion in terms quality, hospitable and reliability. The White Mocha for instance is considered the most preferred product in the industry and can be accessed both from within and outside the company retail stores. People are also talking high hospitable since customers can freely sit, have meetings and chat while in the company premises. Symbols On the other symbols are used as representations of the organizations and they include logos, plush offices and dressing styles. In the case of Starbuck Coffee Company, the logo for instance has been very instrumental in showing the foundations of the company and how it started. The company logo shows some attachment to the seaport roots and it is designed in such away that it is one of the most seductive logos in the industry. This is important in keeping and showing the company heritage (Huy, 2002). Power structures The power structure outlines how the company is controlled and who is at the help and the process of making decisions within the company (Huy, 2000). The structure of Starbuck Coffee Company is not much different from other coffee shops. This is because the executives of the company are placed in the company headquarters and they make the company’s top organ. On the other hand, the district managers placed in various parts of the country are in charge of group of stores and report to the executive at the headquarters. What this implies to the company culture is that protocol is being followed. Organizational structure The organizational structure defines both the structure which is developed in the organizational chart and the written lines of authority and power which shows the rank of contributions of an individual in the company leadership. At Starbuck Coffee Company, in the organizational structure the company CEO is the head of the company, followed by the Executives who sit in the headquarters in Washington, followed by the district managers and supervisors respectively and finally the rest of the staff. What this means is that the culture of the organization is that there is hierarch and orders comes from above (Labianca et al, 2000). Control systems According to the Web Model, the control systems refer to those ways that the business uses for control purposes. Systems for control are required in such areas like finances, quality and rewarding (Huy, 2002). At the company, quality control is top of priority and this can be seen from the sourcing practices the company and the program to support the farmers financially so that they can be able to produce high quality coffee. Further, equity and fairness in recruitment is achieved by giving equal opportunity to the potential candidates irrespective of their cultural background. Finally, sourcing practices is a plus to ensuring efficiency since best prices will always be possible. Rituals and routines This element according to the Web Model is used identify those routine activities that customers may label as acceptable behaviors and this reflects what should be expected to happen in a given situation and what the management should value (Black and Hal 2000) In the company stores, the customers are served with a range of exceptional products and with a lot of hospitality. The company culture is also to serve the customers as they wait in the stores and for those that are on the go and are served in different counters so as to increase the speed of serving them. Recommendations With the evolving business environment organization change has become very eminent for any organization wants to adapt to new situation and ensure that the business is sustained and value for shareholders created. Environmental pressures are the major causes of orgnisational change in many organizations. In the case of Starbuck, environmental pressures that are likely to force it undertake organizational change includes mandated pressure, hypercompetition and maintaining company reputation. In this case therefore, it is recommended that organizational change is necessary to ensure best practices are sustained, quality both in service delivery and product offered as well diversity management are enhanced. References Axelrod, Richard H. Terms Of Engagement: Changing The Way We Change Organizations. San Francisco, California: Berrett-Koehler Publishers, Inc., 2000. Balogun, J., & Johnson, G. Organizational restructuring and middle manager sensemaking. Academy of Management Journal, 47: 523–549, 2000. Black, J. Stewart and Hal B. Gregersen. Leading Strategic Change. Upper Saddle River, New Jersey: Financial Times Prentice Hall, 2000. Eisenhardt, K. Paradox, spirals, ambivalence: The new language of change and pluralism. Academy of Management Review, 25: 703–705, 2000. Gustavsen, B. Theory and practice: The mediating discourse. In P. Reason & H. Bradbury (Eds.), Handbook of action research: 7–26. London: Sage, 2000. Huy, Q. N. Emotional balancing of organizational continuity and radical change: The contribution of middle managers. Administrative Science Quarterly, 47: 31–69, 2002. Ian P, Richard D and Gib A. Managing organization change, China Renmin University Press, 2009 Labianca, G., Gray, B., & Brass, D. J. A grounded model of organizational schema change during empowerment. Organization Science, 11: 235–257. 2000. Leana, C. R., & Barry, B. Stability and change as simultaneous experiences in organizational life. Academy of Management Review, 25: 253–259, 2000. Lu¨ scher, L., Lewis, M. W., & Ingram, A. The social construction of organizational change paradoxes. Journal of Organizational Change Management, 19: 491–502, 2006. Starbuck,. Company profile: The Starbuck story, retrieved on 4th October 2012, available at: http://assets.starbucks.com/assets/9a6616b98dc64271ac8c910fbee47884.pdf Taylor-Bianco, A., & Schermerhorn, J. Self-regulation, strategic leadership and paradox in organizational change. Journal of Organizational Change Management, 19: 457–470, 2006. Kotter, P. and Dan S. The Heart Of Change. Boston, Massachusetts: Harvard Business School Press, 2002. Appendixes Appendix 1: Starbuck Coffee Company logo Appendix 2: White Chocolate Mocha Read More