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Management And Operations | Starbucks Case Study

Introduction

Managing and operating a business is such a practice that involves several challenges and issues which need to be crossed by the managers. The leaders in this respect have to take the responsibility of the overall team, and the manager would control the overall organization. It sounds so systematic, but in reality, it is a bit different. The management, as well as the leaders, face multiple challenges externally and internally which may affect the business as a whole. In that case, both the leaders and managers need to understand their own duties thus they can protect the organization from the issues. Therefore, in this project, the learner would discuss the role of leaders as well as the functions of managers in perspective from Starbucks.

Starbucks corporation is a famous coffeehouse chain in America. It has 23,768 outlets throughout the world. It is being considered as the main representative of ‘second wave coffee’. They have huge and varieties of products such as smoothies, coffee beverages, baked goods, tea and sandwiches. The yearly revenue of this company is almost US$19.16 billion (Starbucks Coffee Company. 2017).

Starbucks Corporation Logo 2011.svg

matic, but in reality, it is a bit different. The management, as well as the leaders, face multiple challenges externally and internally which may affect the business as a whole. In that case, both the leaders and managers need to understand their own duties thus they can protect the organization from the issues. Therefore, in this project, the learner would discuss the role of leaders as well as the functions of managers in perspective from Starbucks.

Starbucks corporation is a famous coffeehouse chain in America. It has 23,768 outlets throughout the world. It is being considered as the main representative of ‘second wave coffee’. They have huge and varieties of products such as smoothies, coffee beverages, baked goods, tea and sandwiches. The yearly revenue of this company is almost US$19.16 billion (Starbucks Coffee Company. 2017).

Starbucks Corporation Logo 2011.svg

Figure 1: Logo of Starbucks

(Source: Starbucks Coffee Company. 2017)

 

 

Assignment 1:

Task 1: Differentiating between the role of a leader and function of a manager (LO 1: P1 & M1)

1.1 Defining and comparing the roles characteristics of leaders and managers by using the example of Starbucks (P1, M1)

According to Drucker and Koontz (2016), a manager seems to be a person of an organization who has to carry out the five basic function of an organization. These functions include planning, staffing, controlling, organizing and coordinating. On the other hand, a leader needs to be concerned about his/ her team. It is the basic duty of a leader to motivate the team members. Thus they can provide the optimum outputs. Leadership and management are vastly differentiated from each other. On the other hand, some similarities are also there. Amalgamation of similarities and dissimilarities would compose the perfect comparison. The basic similarity is both of them are responsible for managing the workforce from different angles. The learner has noted down these differentiations as follows:

Area

Leaders

Managers

Definition

Leadership seems to be the ability to influence and motivate others for contributing to the success of the organization. For example, the leaders in Starbucks would lead and motivate their team members to provide the most effective performances there.

Renz (2016) has commented that management is all about to control and direct the people and the overall organization.

Style of personality

Leaders are brilliant and should have a charismatic personality.

The managers have a trend to be rational, and they can solve the problems by taking them under the inspection of them.

Orientation

Leaders are people oriented.

Managers are task oriented.

Focus

These people are mainly focusing on to lead the people.

These people are busy with managing the works.

Approaches towards the tasks

The leaders look at the problem directly and try to identify the ways by which these problems can be sorted out (Nahavandi, 2016).

The managers are responsible for creating the strategies, methods and policies.

Approach towards the risks

They take risks.

They averse the risks.

Decision making

Leaders are facilitative.

Mangers are involved in the decisions.

Styles

Consultative, transformational and participative

Authoritative, Directorial, democratic, transactional and consultative.

 

Table 1: Comparison between leaders and managers

(Source: Long, 2017)

 

 

Task 2: Applying the role of leaders and the functions of managers in given context (LO2: P2, P3, M2)

1.1 Examining the examples of the role of leaders and the functions of managers by applying in several situational contexts in Starbucks (P2, D1)

Starbucks is already a successful business organization that earn sufficient revenue every year. In spite of that, they have to develop some strategies those would help them to make the organization better and to gather more revenues. Bens (2017) has opined that for continuing a successful operation within the organization, it is more required to exploit the employees in a proper as well as effective way. The differentiation between leadership and management is clear now. Therefore, it is time to concentrate on the activities only. As per the responsibilities of the managers, the people need to develop a plan through which the organization may be continued their activities.

There is no such issues have been discussed in the given case scenario, therefore the plan should be developed to carry on the daily activities in a more proficient way. Koseoglu et al. (2017) have commented that the team leaders are responsible for following the plan made by the managers. Additionally, they would convince other team members to follow the same rule as well. It is highly required to build up a proper team. Therefore, the managers should take the responsibility. They would divide the team, and the leaders should follow that. Proper communication between the employees and the managers as well as the team leaders is necessary. Therefore, the team, leaders should take the responsibility in this regard.

They should maintain a chart of daily activities where the schedule and work progress of every day would be documented. The leaders should report to the manager about the progress. For example, while attending the customers in the coffee joint, the team leaders should take the feedback from the customers. It would help the leader to assess the service person's capability. If any negative impact would be received, therefore the person should be warned. The leader should document it as how many warning the person may get. It would help to make the service better.

1.2 Applying different models and theories of approach including situational leadership, contingency and systems leaderships within the context of Starbucks (P3, M2)

Application of several leadership theories and models may help the leaders to lead the team more effectively. Three leadership approaches have been mentioned here. Among them, the situational approach considers that it cannot be possible to maintain a particular leadership style. Rather it is better to say that no specific leadership style is there. Chemers (2014) has stated that the leaders need to develop their strategies in accordance with the situation. For example, if a leader in Starbucks may notice that a newly hired service person is feeling ashamed to serve on a table, the leader should talk to the person personally and should try to overcome his uneasiness rather create pressure on his.

On the other hand, the system leadership style includes both the formal and informal organizational policies, procedures and structures. Northouse (2015) has declared that the primary elements of this theory are the mechanism which can develop, communicate and also execute the decision. Most importantly, the selection procedure of the leaders has also been included in this approach. While implementing this approach in Starbucks, the leaders should develop the plan based on which the followers would be performed. Besides that, the contingency theory should also be discussed here. It indicates to the situation as well as the style that should be matched up with the leaders. This theory believes that the success of a leader lies on various contingencies in the form of given tasks, variable sin groups and subordinates.

Like several other organizations, Starbucks is not currently suffering from the lack of leadership knowledge. In spite of that, it is highly required to implement a proper leadership strategy there as it may help the leaders to develop their plans. The organization can implement the situational leadership style as it would operate the employees in a more flexible manner. Therefore, it is expected that a good relationship would be developed between the leaders and the employees. As a result, the productivity of the company would be enhanced in future.

Assignment 2:

Task 1: Demonstrating the appreciation of the role of leaders and managers play in the operation function of a business organization (LO3: P4, P5, M3)

2.1 Explaining the key approaches of operation management and role of managers and leaders play in Starbucks (P4)

Operational function of a business organization seems to be the activities in a whole which are required to maintain the higher level of performance level in the market. As stated by Rapp et al. (2016), operation management is such a most important activity of business field, and it is related to the design as well as operation processes of the company. Starbucks is a coffee shop. Therefore, they have to deal with several customers every day.

Thus, the company should focus on the enhancement of the performance level of their customer service executives. Oh, et al. (2017) have commented that some basic responsibilities are being included in operation management. The system should assure that the organization operation is being continued properly. Other than that, it also ensures the least involvement of the resources. However, despite that the needs of its customers would be met. This is the strategy that should be developed by the managers of the company. In addition, the leaders should train the employees as efficiently. Thus they can serve to multitask at a time. For example, if there is a shortage of employees one day in Starbucks and the crowd is more. Therefore the existing employees may need to serve the role of two employees at a time. The customers would not suffer for the employee deficiency. 

Koseoglu et al. (2017) have stated that the operational approaches include lean enterprise, redesigning the business process and six sigma. Six sigma is all about the quality. It is associated with the financial aspect of the organization too. It can forecast the increment of profit level and the policy to reduce the costs. Several tools have been used by six sigma and among them trending chart, and defect calculation should be mentioned here. Lean manufacturing can also be implemented in Starbucks as it reduces the waste systematically. Therefore, implementation of this approach may decrease the unwanted workload from the employees. As a result, the employees would be happy, and the productivity would be improved.

2.2 Explaining the value and significance of operation management to achieve the business objectives by providing the examples of Starbucks (P5, M3)

Figure 2: Operation management plan of Starbuck

(Source: Mason et al. 2017)

Operation management is being considered as the most prominent system in today’s business world. Mohammadi et al. (2014) have discussed that most of the modern business organizations have realized the importance of operation management. For example, Starbucks has developed their plan for operation management. In that plan they have involved several approaches including quality management, product designing, designing the process and capacity, location strategy, designing the layout, job designing, supply chain management, inventory management, scheduling and maintenance.

The company has redesigned their products. For example, they have designed the Starbucks’ mugs. It would attract the customers more towards the shop. Bahmani-Firouzi and Azizipanah-Abarghooee (2014) have opined that invention or innovation can be considered as two major strategies to attract the target customers towards the business. The company has focused on maintaining the quality as well. They have become more careful while sourcing the coffee from the beans. They buy the coffee from certified farmers only. Starbuck’s has successfully redesigned the capacity and process of the company. They have some highly efficient process which results from the high quality coffee. The company has aimed to increase the cost-effectiveness through the efficiency of processes and workflows.

Zhang et al. (2013) have identified that location plays the most important role in business. It mainly depends on the target customer and from which area they belong to. The targeted customers of Starbucks are the urban people. Therefore, all the outlets of the company are situated in the urban areas. The layout design of the company has maximized the workflow. It supports the friendly and warm atmosphere of the company as well. The employees are the assets of the company. Therefore, Starbucks has developed the ‘employee first' strategy. It makes the employees happy and would be retained in the company. Other than that, the global supply chain of the company involves the farmers from the developing countries.

The inventory of the company is related to the supply chain of the company.  In Starbucks, the inventory management includes the manual monitoring and office automation. The company has decided to reduce the stock out and to maximize the supply of coffee beans (Starbucks Coffee Company. 2017). The automated as well as manual scheduling approaches are being used for the scheduling system of the company. A dedicated team is there to maintain the physical assets of the company.

 

 

Task 3: Demonstrating the understanding the relationship between management and leadership in the contemporary business environment (Lo4: P6 & M4)

3.1 Assessing the factors in the business environment which have been operated by Starbucks and has to impact upon the operational management and decision making process by the leaders and the managers (P6, M4, D2)

From the above discussion, it is clear that the company has taken a vast plan for operation management. Zhang et al. (2013) have stated that developing a plan is not everything; it is more important to apply them effectively within the business organization. Thus, it can be said that the reason for such success for the Starbucks Coffee Company lies on the proper implementation of their operation management plan. These decisions have included several areas of businesses where the company has identified to provide more focus. 

For being an internationally famous coffee shop, the organization has decided to redesign all main aspects as the business can be operated in a better way. For example, the company has planned to design premium quality of products. This concept of premium quality has been generated from their broad differentiation strategies. The premium pricing strategy has been amalgamated with it. Similarly, the company has focused on the high quality of coffee bean as well, and that is why they have selected the certified farmers only thus the authenticity can be witnessed. Other than that, the company has started focusing on the quality as well. Even, they have planned a better procedure for pouring the coffee bean too. Therefore, it can be expected that the company would earn better revenue in future. Moreover, they have planned to expand their business more, and they have already planning to target the developing countries as well. Therefore, a new journey has been started by the company. By analyzing the operation plan of the company, it can be said that this journey would be more profitable for the company.

 

 

Conclusion

This project has focused on the operation management of Starbucks. It is already a famous coffee shop chain in the world. They have redesigned their operation management systems which include several parts of their business. Other than that, the learner has included various leadership styles in this project as well. Even, the most suitable leadership approach for the company has also suggested here. As per the present scenario, situational leadership style has been suggested to the company. Other than that, a comparison has been made in this project between leadership and management. In the overall aspect, it can be said that this assignment would provide a complete guidance of leadership and management approaches.