Famous Leader - MGT420 ASSIGNMENT PDF

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FACULTY OF BUSINESS AND MANAGEMENTDEGREE IN CUSTOMER SERVICE MANAGEMENT (BA234)MGT 420PRINCIPLES AND PRACTICE OF MANAGEMENT“A FAMOUS CONTEMPORARY LEADER”PREPARED FOR:PUAN MAZIAH BINTI ABD RAZAKDR NURUL AISYAH AWANIS BINTI DATO’ HJ A RAHIMPREPARED BY:NUR AINA NASUHA BINTI DZULKAFLEE2020489426SUMISSIO...

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FACULTY OF BUSINESS AND MANAGEMENT DEGREE IN CUSTOMER SERVICE MANAGEMENT (BA234) MGT 420 PRINCIPLES AND PRACTICE OF MANAGEMENT “A FAMOUS CONTEMPORARY LEADER”

PREPARED FOR: PUAN MAZIAH BINTI ABD RAZAK DR NURUL AISYAH AWANIS BINTI DATO’ HJ A RAHIM

PREPARED BY: NUR AINA NASUHA BINTI DZULKAFLEE 2020489426

SUMISSION DATE: 18 NOVEMBER 2020

TABLE OF CONTENTS

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CONTENTS

PAGE

1.

Introduction

3

2.

Leader’s Background

4

3.

Contents: i.

Leader’s Traits and Skills

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ii.

Leader’s Behavior

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iii.

Leader’s Power

10

4.

Conclusion

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5.

References

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6.

Appendices

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INTRODUCTION A leader is a person who lead a group of people towards goals. Being a leader is not about having position, title and seniority. Many people believed that by holding a higher role, they would automatically be assigned as a leader. Most people do not get assigned because of their leadership potential but because of their success on their previous job. To be a leader they must be someone who have potential to guide and influence the group to work in any kind of situation to achieve their set goals. A successful leader would have a vision to set up a team and strive to meet with objectives. To be a leader they must prove that they can lead their group and able to set a good example that can inspire and influence others to work in confidence. This shows that how well a leader lead it will determine how successful they are. A team will only be successful if their leader ability allows them to (Morgan, 2020). In conclusion, a leader must have all the leadership characteristics to make sure their group be able to meet the company’s need. Meanwhile Professor Kotter identified leadership as about aligning people to the vision, that means buy-in and communication, motivation and inspiration. But it is hard to make any leadership skills work if the subordinates are not willing to listen to leader. Since the style relies heavily on the vision-buying team, leaders need to concentrate on people's skills. In a way, instead of handling activities, leadership needs to handle individuals and empowers them so they can achieve company’s goals.

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Leader’s Background Howard Schultz was born in Brooklyn, New York on the 1953. He was born and raised by a pair of parents, name Fred and Elaine Schultz. Howard Schultz was the eldest son in the family out of three siblings. Howard Schultz was just 3 years old when his parents decided to move into a small apartment in Brooklyn when his youngest just born and due to some money issues. Even though it was only small apartment, both of his parents wanted to provide the best surrounding for their children (Schultz, My Story). Howard Schultz lives in a very poor state and both of his parents have not finished their high school, so it is hard for them to find decent job. After returning from World War II, Howard’s father was the only one who spent his life working low paid jobs as a laborer. Howard’s family rarely have money on them, so it was quite hard for them to pay for the utility bills and buying food. Since kid, Howard always saw his parents fought about money when they are having dinner. Sometimes, Howard’s mom always refused to answer whenever her phone rang and insist Howard to answer because it was a bill collector. To escape this chaos, he always sitting in the stairwell between floors and imagining a better life. Besides, he always does sports when he feels stressed out just like other teenagers. By imagining the better life, it helps him feel confidence to believe that he could one day build a better life for himself (Schultz, Pour Your Heart Into It, 1999). Howard Schultz was an active man. Just like other teenagers, Howard enjoyed playing basketball with his neighbor at his apartment basketball court. He played it as a hobby or just as an escape from his parents whenever they argued. In high school, he played variety of sports but finally got himself attached on football. He saw football as one of his way to escape from his current life. Howard work hard in high school as footballer and confident that he will become a famous footballer one day. In 1971, Howard Schultz pursue his study in Northern Michigan University through a football scholarship. Howard played football in university, but it was never materialized as if it was only a dream of Howard to become a footballer. He could not live up to his dream and end up work as a part timer to pay for his university fees. Howard also applied for student loan because his part time job could not support his university fees. Even in university, Howard was having a hard life, but it does not stop him, and all his hard work paid off when Howard finally graduated with a Bachelor of Science Degree in Communication in 1975. Even though Howard’s parents could not come to his graduate ceremony, he knew that both of his parents were proud of him (Schultz, My Story).

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After graduated, it was hard for Howard to find a job. His first job was selling office equipment from door to door. Although he received 50 cold calls a day, it does not stop him to continue with his work because Howard really loves to communicate with people. Day by day, he got used to his first job as a salesman and was doing a pretty good job as a seller. Once he got his paycheck, he gave half of them to his parents. Although Howard loves his current job, he decided to explore other job at different companies to gain more experiences to improve himself. Howard Schultz then worked at a European company that made of housewares in United States. One of the loyal customers that always buy housewares of the company is a small coffee company in Seattle, Washington named Starbucks. In 1983, Howard was on a business trip in Italy with Starbuck company. He realized that he was selling more coffee makers to Starbuck even though on that time Starbuck was only a small company and just had a few stores. As soon as he arrived in Italy, he tasted his very first espresso at Starbuck. Howard was amazed by how smooth the espresso was, the barista who prepared it and the café atmosphere. Howard expressed his vision and point from his view of providing a better place for customer to enjoy their coffee because that time Starbuck does not have any seating. However, the founders of Starbuck were not interested in his ideas (Schultz, My Story). Howard Schultz open his own coffee store, but it was not doing well like how he expected. For a year, Howard live off his wife salary to survive. Due to his patience and hard work, he had 3 espresso’s bars named II Giornale in 1987. People around Howard believe by his vision and how success he will become so they invested in his business. All in all, II Giornale proved to be a success and two years later, Howard Schultz bought Starbucks because he found that the owners of Starbucks were going to sell the store, the roasting factory and the brand itself because the company was having troubles. Merging the two entities, he became the CEO and Chairman of the Starbucks Coffee Company. He transformed the business to sustainable profit and growth. By 2018, Starbucks ranked fifth on Fortune’s List of the World Most Admired Companies 2018 and 2019. Howard Schultz then officially left his Starbuck chairman position to become a chairman emeritus in 2018. Howard Schultz said that he would never forget Starbuck and people who have worked there for decades. Until now he was known a driving force for Starbucks until the company became a global coffee chain with over 23,000 outlets in 72 countries (Schultz, Pour Your Heart Into It, 1999).

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CONTENTS i.

LEADER’S TRAITS AND SKILLS.

A leader is someone who have vision and know when to seize the opportunities. To be a leader they must know how to communicate and interact with groups to gain group members trust to achieve company’s goals. Therefore, a leader needs to have all the traits and skills in order to be a successful leader. 1. Intelligence According to Psychologist Robert Sternberg defined intelligence as the mental abilities necessary for adaptation to, as well as shaping and selection of any environmental context. Intelligence is very important in every person as well as leader. Undoubtedly, a leader must have intelligence and acquire knowledge to keep the organization running. Howard Schultz always believes intelligence is important. This leadership can be proved by Howard Shultz's idea of improving Starbucks as a place for the community to enjoy their coffee at a cafe in a romantic atmosphere. Howard believes that a simple cup of coffee can create community among them, and he was determined that he can bring Starbucks to become world class coffee. Starbucks did not provide any seats to customers at that time and the customers and coffee was only available for take-out, so Howard expressed his view of Starbuck 's to the founder, Jerry Baldwin, Gordon Bowker, and Zev Siegl. However, his idea was turned down because the founders want to keep their traditional model of businesses and they did not believe in Howard’s vision. They wanted Starbucks to remain strictly as a coffee and equipment vendor (Schultz, My Story). Secondly, when Howard was hired as Starbuck Head Marketing, he noticed that usually the first customers always felt uneasy when they were trying to make an order. It is because they did not have basic knowledge about coffee, so it makes sense why customers could not enjoy their coffee properly. Howard therefore came up with the idea of developing customer-friendly skills and making brochures so that customers can learn the basics of coffee. Howard got his idea in improving Starbuck’s services from his current jobs. He gains lot of experiences and knowledges from his previous jobs. For that reason, Howard have been contributing lots of ideas to improve Starbuck from a small coffee shop to a countless coffeehouse chains in the world. By now, the Starbucks employees still respect Howard for his intelligence and endless ideas (Schultz, Pour Your Heart Into It, 1999). 6

2. Maturity Most dictionaries define maturity as fully grown or changing of physical structures but in management maturity means the goal of increasing intelligibility and using this intelligibility to improve awareness, understanding, management, and growth of the self. In business, maturity often being compared to the ability of leader to handle their emotions and avoid acting selfish and admitting their mistakes. Most successful leader have this trait because they need to focus and able to handle things no matter in what situation (PHILIPPE DENICHAUD, 2016). Howard Schultz proved that he is capable in managing Starbuck when Starbucks was in a crisis. A Starbucks had to face many difficulties due to many mistakes in making decisions, Howard always took responsibility from his actions. In 2008 there was a financial crisis or also known as the global financial crisis and its effect almost worldwide. As Starbuck grew bigger their coffee was also improved and the higher the quality the higher the price. As the price of Starbucks’s coffee started going up, people choose to buy coffee with cheaper price Therefore, this is the reason on why Starbuck were also having economic slowdown on 2008. By 30 March 2008, its profit had decreased by 28% compared to the same period in 2007. As a result, Starbucks must close 300 stores in 2009 and laid off 6,700 employees. Howard Schultz never hesitates to admit his mistakes and tries to fix the damages. He instantly apologizes to the employees and their family because the company had let them down. As a leader, Howard took the blames and promises to change the situation they were facing then (Shezray Husain, 2014). 3. Self-confidence Confidence is a must have trait in every leader. It is because confidence works as the driving force. If the leader has self confidence in himself, it gradually built trusts between employees because they believe that a confidence leader has a better vision and mission to accomplished. Once the leader feels confident, they have courage and can face all kind of situations. After the Global Financial Crisis, Starbuck had a meeting with their store managers. Howard decided to come out and his employees about the real situation of Starbuck economic even though it might worry the employees. Howard informed his employees the solutions against the crisis. Howard noticed that nowadays Starbucks focused more on the profits. Therefore, he came up with the solution that they must shift their focus away from bureaucracy and back to customers just like the old Starbucks. Howard had an entirely different view when he stated his solution. He told the workers the company should not only blame the economy. It is because 7

heavy spending by Starbucks to accommodate its expansion has generated a bureaucracy that hidden its problems. Starbucks soon embarked on a technology-based approach. Howard also suggested in which workers will openly think about the company and contribute to plans and ideas. In March 2008, Starbuck created “My Starbuck Idea”. It was created for customers so they can exchange their ideas in improving Starbucks to a better way and share their opinions on everything such as products, services, layout, advertising, corporate social responsibility, in-store music and so on. After the crisis, Starbucks had to build its customer relationship and convince the world that they cared about quality and consistency (Shezray Husain, 2014). Because of this, Starbuck handle the crisis well and they received a million positive feedbacks from customers. In addition, their sales were doing well from then till now.

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ii.

LEADER’S BEHAVIOR.

Leadership behaviour is the traits and actions that make an individual effectiveness as a leader. Behaviour is the process by which a person can guide, direct and influence their subordinates to meet organization goals. Leaders use this behaviour to motivate people into action when they have a vision for an organization (Leadership-Central.com). 1. Relationship-oriented Style Relationship oriented style focus is motivating, supporting and developing individuals and teams. This type of leader’s behavior seeks to found meaningful relationships with their staff and aim to utilize this emotional connection to maximize staff performance. This type of leadership will develop good relations between leader and subordinates (Jonathans and Ling). Everyone knows that Starbucks employees admired Howard Schultz as a great leader. For this reason, Howard took care of his employees. He put his employees as priority aside from his families. In 1988, Starbucks became one of the first companies in America to give health insurance to all its employees including part-time workers, a benefit that was unheard of at the time. It is one of the benefits that Howard established because he keeps remembering his father who was immobile after accident. At that time Howard’s family could not afford to give a better health care to his father. Because of that he was afraid not getting a better health insurance. Therefore, Howard wanted to give a better health care to his workers by developing health-care program. From the higher to the lower hierarchy workers, all of them admitted that Howard really took care and concern about their health. Thus, all of Starbucks’s workers respected Howard (Schultz, My Story). Howard treat his employees and even his part time workers with the kind of respect most companies show only for high executives. Howard believes that the best achievement that he proud of the most is the relationship of trust and confidence he built with the people that works at the company. Howard Shultz always ask about his workers whereabouts and their well fares. He never missed even a single worker in his company. He always takes sometimes to have a chat with his employees even only for 10 minutes. This is because, Howard believes that it will strengthen the bond between him and the employees. In addition, he wanted to make the employees feels like they were at their own home. In words, Howard want to make the workplace as a comfortable space for the employees. Howard said that treating employees nicely should not be viewed as an added cost that cuts into profits but as a powerful energizer that can grow the enterprise into something greater (Schultz, Pour Your Heart Into It, 1999). 9

iii.

LEADER’S POWER.

Leadership power is the influence that ever leaders have over their subordinates. By having power, it can persuade people to follow what leader ask them to do because leader have authorities over them. In order to be a good leader, they must possess type of powers that can encourage himself and team to accomplish a goal. 1. Expert Power The definition of expert power is a base of power derived from knowledge or perception of knowledge so that subordinate will follow an instruction or order. Expert power exists when the subordinate’s trust their leader in handling any problems because they believe that the leader has skills and knowledge compared to themselves (Expert Program Management). Howard Schultz proved that with all the knowledge he got from his previous jobs and all the years he spent in his own coffee shops brought results. When Starbucks facing bankruptcy and the founder decided to sell the company, Howard took the risk and buy Starbucks. From the beginning of his leadership at Starbucks, Howard already set up his objectives and goals that the company need to achieve. All the employees put all their trust in him because Howard run a coffee shop before. In addition, his coffee shop was a success. Therefore, they believe that Howard might want Starbucks to reach the peak as his coffee shop. Howard make sure to use his power as efficient he can so that he would not make any mistakes even though the first moment he became the CEO of Starbucks most of the employee had a smug look of doubters of Howard dreams. Somehow Howard explained to the employees that he was in their place before and he had the same passion as in them. Thus, Howard promise that he would not let them down and he want to build a national company whose values and guiding principles all of them can be proud of (Schultz, Pour Your Heart Into It, 1999). 2. Referent Power Referent power defined as the ability of leader to inspires and influence his subordinates to run a business. This type of powers comes from the admirations of subordinates to the leader. Even though it is not the formal power however it can be use as a status that shows the leader as a role model (Expert Program Management). Howard Schultz showed referent power because of the respect he got from his colleagues and employees. From their feedback at the open forums, they respected and liked the direction

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Starbucks are heading in. This can be proved by how well Starbucks was doing now compared to before. After 5 years leaving Starbucks, he came back as CEO. As soon as he came back, he noticed there were so many changes to Starbucks, not from the interior designs or how the coffee taste but by how terrible morale at Starbucks was. Divisions starts to grow in company. The people were cynical and wary, beaten down and unappreciated. As result, most of the employees felt abandoned by previous management and feel anxious around Howard. The trust and common vision that Starbucks had when Howard first joined had frayed badly. To fix all the problems arise in the company, Howard decided to be honest with the employees, share his plans and excitement with them. In addition, he follows the path that he had set up the moment he steps into Starbucks and delivering what he promised. No one follows the first he took the initiative until he shows them with his own actions that his promises w...