Starbucks Organizational Structure Analysis PDF

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Organizational Chart Analysis: Starbucks Coffee Company

Student’s Name Institutional Affiliation Course Instructor’s Name Date

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CEO

Business Analytics Manager

Territory 1 Manager

Territory 2 Manager

Territory 3 Manager

Business Analyst

Business Analyst

Business Analyst

Development Manager

Developer

Developer

Developer

Quality Assurance Manager

Tester

Tester

Tester

Hierarchy of Positions The hierarchical organization of Starbucks involves a top-down formation at the highest managerial level where the chief executive officer oversees other managers in departments such as business analytics, product development, quality assurance, and various functional

3 departments that facilitate business operations. For instance, marketing, finance, human resource, and procurement are vital components of organizational success, thus requiring the existence of leadership positions to oversee the continuity of various functions. The chief executive officer at Starbucks is responsible for ensuring the company’s success in its several subsidiaries which are designed as territories such as America, Europe, Middle East, Russia, and Africa, and China and Asia-Pacific. Therefore, the top managerial team is tasked with coordinating a series of managers who in turn oversee the daily operations of an organization. In Starbucks’s case, the territorial managers also have teams that help in realizing the specific objectives set within the territory. For example, the company’s spread from Canada to other parts of the world has been a gradual process, implying that the various territories are at different stages. In Africa, China, and the Asia-Pacific region for example, more efforts are focused towards market penetration, thus requiring a different business approach from that applied in established markets. Also, each market requires the analysis of customer preferences and the modification of products to meet the identified demands. Therefore, each territory has a leadership hierarchy which comprises of the various components that are deemed vital for business growth in the particular territory. Further, the territory leadership must report to the overall leadership team in Canada regarding the success or challenges experienced in the territory. The organizational structure of Starbucks is designed to facilitate top-town and horizontal communication where the top leadership gives directions to territorial managers and the same is communicated down to the employees while horizontal communication involves liaising between various departments within the same territory to facilitate business operations. Usually, directions from the head office are received at the territory level by a territory manager who then communicates the same to his juniors. The

4 juniors then communicate horizontally or vertically depending on the nature of the information and its role in facilitating a particular objective. Relationship of Positions Interactions between various positions at Starbucks depend on the role of each in facilitating the realization of the company’s objectives. For example, the chief executive officer is responsible for steering the company according to the directors’ desires. Therefore, he performs the role of applying managerial functions in a manner that corresponds to the magnitude of the tasks that must be executed to realize particular objectives. As a multinational corporation, Starbucks generates millions of dollars, thus requiring the involvement of a chief finance officer. Other positions that require overall oversight include marketing, human resource, product development, and legal affairs. Therefore, there are general managers to cater to the company’s needs in each aspect, bearing the need to keep up with trends and market dynamics. For example, the chief financial officer is tasked with ensuring that financial resources are adequately distributed to all territories based on their unique needs. Similarly, the chief human resource manager is responsible for ensuring that all territories hire and maintain the best employees by applying the latest trends in human resource management which may include onthe-job training, improved working conditions, and good remuneration based on industry standards. The chief executive officer is required to perform his roles in a manner that satisfies the financial, human resource, marketing, and research needs of the organization. However, the expansive and demanding nature of the duties, including the fact that the company operates across various continents, implies that an individual may not accomplish the tasks. Therefore, there are vice presidents in charge of various departments and sectional managers depending on the complexity of the tasks to be executed. For example, there are vice presidents responsible for

5 marketing in each territory who report to a senior vice president in charge of marketing and who in turn reports to the chief marketing officer. The chief marketing officer then reports to the chief executive officer. Similar hierarchies are replicated across all organizational departments, thus ensuring that there is an entire team to oversee the execution of duties. All departments comprise of junior employees who perform the day-to-day duties associated with the company’s objectives, mainly the preparation and delivery of coffee and other products to the customers. The horizontal hierarchy ensures that employees can coordinate between various duties, as in the case of meeting particular territorial needs as directed by the territorial manager while adhering to overall organizational objectives as directed by vertical hierarchical managers such as quality assurance and business analytics. Starbucks’s utilization of the vertical and horizontal structures leads to the realization of the matrix organizational structure where directions are passed from the top leadership to junior employees and across departments and employees. The vertical structure is more complex since it involves the input of every organizational manager beginning with the chief executive officer. Consequently, the system creates challenges in the dissemination of information, given that highlevel coordination is required to facilitate information flow from the top executives to the territorial managers all the way to the junior staff. The system creates opportunities for inefficiencies, bearing that information must be updated regularly to avoid inconveniences in the communication process. For example, the territorial manager must update the overall manager on a daily basis to determine an appropriate course of action, failure to which the possibility of inconsistencies arises. Similarly, all executive directions must be communicated with speed to ensure that all territories perform in accordance with the set objectives and the available resources.

6 The horizontal structure presents an opportunity for Starbucks to explore the needs of customers within a particular territory without necessarily requiring directions from the top leadership. However, such decisions are ultimately communicated through the vertical system for approval and subsequent support through financing and other inputs such as the dispatching of trainers. The horizontal system allows decisions to be made even at the individual outlet level since it is possible for consultations to occur between employees, supervisors, or managers regarding a situation after which the most appropriate action is adopted. For example, product managers can consult with business analysts and product developers within their territories to determine the most appropriate product variant to serve and the factors that could facilitate or hinder the successful rolling out of the product. Subsequently, the testers and the chefs could be instructed accordingly for the preparation of the appropriate product. Such an organization empowers employees at all levels since their input is essential in achieving the desired objectives which may involve altering the product slightly to meet the individual tastes and preferences of customers. Also, the arrangement eliminates the bureaucracy associated with consulting the vertical hierarchy, considering that such may be time consuming given the complexities associated with consulting managers or supervisors who have to consult their seniors before a decision is reached. Conclusively, Starbucks’s matrix organizational structure plays a vital role in facilitating the realization of organizational objectives given that the vertical arrangement helps in disseminating strategic information while the horizontal system facilitates the speedy sharing of information for efficiency within territories and individual retail stores.

7 References Kao, J. (2020). Reimagine, Redesign, Reorganize – The Starbucks Approach To Strategic Transformation. https://www.forbes.com/sites/johnkao/2020/06/17/reimagine-redesign-reorganize--thestarbucks-theorem-for-transformation/?sh=1f33409cf72a Meyer, P. (2019). Starbucks Coffee’s Organizational Structure & Its Characteristics. http://panmore.com/starbucks-coffee-company-organizational-structure...