Organizing Function of Management

HEADER: ORGANIZING FUNCTION OF MANAGEMENT

Organizing Function of Management on

Starbucks

Sandy Fitch

University of Phoenix

Philip E. Heckman, Jr., MBA

December 2006

Organizing Function of Management on Starbucks

There are many various factors that influence organizational planning within the Starbucks organization. One main factor that has influenced the organizational planning within the Starbucks organization is when Howard Schultz took over operations. In his first few months at Starbucks, he spent most of his time in the main four Seattle stores. He spent time working behind the counters, tasting different kinds of coffee, talking with customers, getting to know store personnel, and learning the retail aspects of the coffee business. He was a hands on kind of guy and did not just sit back and do nothing for the organization. Through taking such an active role in the organization, he developed many ideas for the company. As a result, this helped the organization’s organizational planning aspect. Schultz told the group that his vision was for Starbucks to become a national company with values and guiding principles that employees could be proud of. He indicated that he wanted to include people in the decision-making process and that he would be open and honest with them. Physical assets as stock is surging along with healthy sales at existing locations, the goal is to set a new long-term goal to have 40,000 coffee stores worldwide, 10,000 more than its previous target and more than triple the current number. The coffee retailer did not give a timeline for its long-term growth plans but said it expects to have more than 14,000 stores worldwide by the close of its fiscal year ending in the fall of 2007. There are currently about 12,000 Starbucks stores around the world. Starbucks said half of the eventual 40,000 stores will be outside the United States. The company said Thursday it plans to expand into Brazil, Egypt, Russia and India by the end of next year, giving Starbucks a presence in 40 countries worldwide. (Linn, Allison)

Another main factor that has influenced the organizational planning within the Starbuck’s organization is their strategy to make Starbucks a great place to work. One thing Starbucks did was they started offering an employee stock option plan. The goal of this was to develop all Starbucks employees into partners, give them a chance to share in the success of the company, and make clear the connection between their contributions and the company’s market value. They also created a stock purchase plan for employees. Also, employees were paid way above the national average compared to similar jobs. This organizational planning helped created a positive environment for employees which in turn made the employees actually enjoy work. In return, this helped customer relations which led to increased sales. (Linn, Allison)

Another main factor that has influenced the organizational