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Management practices employed by Starbucks
Karlene Boreland-Wallace
Human Resource Management
Monroe College
Professor Patricia Smith
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Abstract
Have you ever wondered why some business fail? Management is a vital aspect of the economic
life of man, which is an organized group activity. The same is true when operating a business.
Human resource management (HRM) is the process of employing people, training them,
compensating them, developing policies relating to them, and developing strategies to retain
them. As a field, HRM has undergone many changes over the last twenty years, giving it an even
more important role in today's organizations. Without Management, “The resources of
production remain resources and never become production”. In the research paper we will look
at the management practices employed by Starbucks and how these practices have either
benefited or cost the company. I will be also examining Starbucks company managed human
resources. I will examine the challenges in human resources has the Starbucks experienced. I
will discuss what regulations affecting human resources. I will examine the culture of the
organization and how it either change or remain constant over time. You will also find out
information how the company managed organizational change. We are going to examine what
management practices accomplish for an organization? It can lead to the success and growth of
the organization.
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Mission Statement
“To inspire and nurture the human spirit-one person, one cup and one neighborhood at a
time.”
Vision Statement
“Establish Starbucks as the most recognized and respected brand in the world.”
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Starbucks Values
With our accomplices, our coffee, and our customers at our center, we live these values:
 Creating a culture of warmth and acceptance, where everyone is welcome.
 Acting with courage, challenging the status quo, and finding new ways to develop our
company and each other.
 Being visible, interacting with transparency, dignity and respect.
 Providing our best in everything, holding ourselves responsible for results.
 We are execution driven, through the focal point of humanity.
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Management practices employed by Starbucks
Starbucks was first opened in Seattle, Washington in 1971 by three individuals, English
teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker. Their first
location was situated in Pike Place Market to sell high-quality coffee beans and equipment. The
first Starbucks location was at 2000 Western Avenue from 1971 to 1976. That store at that point
moved to 1912 Pike Place.
During their first year of operation, they acquired green coffee beans from Peet’s, at that
point started buying straight from Producers. The name is motivated by Moby Dick’s first mate.
This name and the mermaid logo were inspired by the love of the sea, from Starbucks original
location in Seattle Washington in the heart of Pike Place Market.
Beginning as a single shop specializing in high quality coffee and brewing products the
company developed to be the largest roaster in Washington with different locations until the
early 80’s. In 1981, current CEO Howard Schultz, recognized a valuable opportunity and started
working with the originator Jerry Baldwin.
After a trip to Italy to discover new products, Schultz realized an opportunity to bring the
café community environment he found in Italy to the United states and the Starbuck’s brand we
know today began to take form. Offering espresso by the cup was the first test. Schultz left
Baldwin to open his own Italian coffee house Il Giornale which found over the top success and
in 1987 when Starbucks chose to sell the original 6 locations, Schultz raised the money with
investors and acquired the company and melded them with his Italian bistro locations. The
company experienced rapid development going public in 1992, and growing tenfold by 1997,
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with locations around the United States, Japan and Singapore. Starbucks also began expanding
its brand.
In 1984, the first proprietors of Starbucks, led by Baldwin, took the opportunity to buy
Peet’s. (Baldwin still works there today.) In 1987 they sold the Starbucks chain to Schultz’s Il
Giornale, which rebranded the Il Giornale outlets as Starbucks and rapidly started to grow.
Starbucks opened its first locations outside Seattle in Vancouver, British Columbia, Canada (at
Waterfront Station) and Chicago, Illinois, United States that same year. At the time of its initial
public offering on the stock market in 1992, Starbucks had grown to 165 outlets. Now it has
more than 23 000 stores worldwide – both owned and licensed.
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How has the company managed human resources?
Human resource management (HRM), or the process of finding, developing, and maintaining the
right individuals to form a qualified work force, is one of the most difficult and important of all
management tasks. On the other hand, activities implemented to attract, develop and keep a
productive workforce within an organization. As the well-known company Starbucks which have
their superb individual HRM in their theory. With the progression of society, the individual
HRM theory has been bring incredible deal of benefit for company development. Starbucks is
known to have the extraordinary management team and staffs due to the fact Starbucks primary
mission statement is “provide a great work environment and treat each other with respect and
dignity.”
What challenges in human resources has the company experienced?
Analysts stated that Starbucks greatest challenge in the early 2000s was to ensure that the
company's image as a positive employer survived its fast expansion program, and to discover the
right kind of people in the right numbers to support these growth plans. Considering the speed at
that the organization was expanding, analysts puzzled whether Starbucks would be ready to
retain its spirit once it doubled or tripled its size. At the beginning of 2000, the company began to
point out signs that its generous policies and high human resource costs were reflecting on its
financial strength. Starbucks spent more on employees than it did on advertising, which stood at
$68.3 million in fiscal 2004.
Starbucks was finding its human resource costs burdensome because of the human resource cost
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the company effected an increase of 11 cents on its beverage prices in mid-2004. Analysts
questioned whether the company's cost problems could be addressed by a price increase, as
customers already paid a premium for Starbucks beverages. On the other hand, it would not be
easy for the company to reduce its benefits, as it might lead to a serious morale problem within
the company.
What are regulations affecting Starbucks human resources?
Employment laws that affect Starbucks include: The Civil Rights Act of 1964 title VIITitle VII of Civil Rights Act of 1964 is a federal legislation that prohibits discrimination in
hiring, firing, compensation, apprenticeships, training, terms, conditions, or privileges of
employment based on race, color, religion, sex, or national origin. (Kelly) Laws like these affect
all companies in many ways. This implies that all companies over 15 workers must give rise
to opportunity to all candidates and workers for advancement who are qualified for a certain job.
(Title) This law is strictly followed by Starbucks, who has their own equal opportunity policy to
fit the guidelines found in Title VII of Civil Rights Act of 1964. This law has contributed to
the fact that 33% of Starbucks employees are Minorities, 64% of Starbucks workers are ladies,
and Starbucks is additionally on the cutting edge of pushing discrimination back
by not separating by sexual introduction and indeed giving benefits to same sex domestic
partners. (100) It is additionally imperative to note that this law also protects workers from any
sorts of badgering within the work environment moreover caused by discrimination.
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The Family Medical Leave Act, also known as FMLA, is a law that requires firms with
50 or more workers to supply up to 12 weeks of job-secure, unpaid take off on the birth
or adoption of a child or the serious sickness of a life partner, child, or parent.
Starbucks appears strict on their FMLA arrangement to begin with. They encourage
utilizing all sick and holiday time off time before asking for days off. Typically, since benefits
like this could be exceptionally exorbitant. In any case, Starbucks does give these benefits
and indeed gives these benefits to household partners. Also, they make
it exceptionally simple to discover the forms and documents you wish when asking for these
days. (Leave) in addition, Starbucks too offers numerous other opportunities for unpaid
but extended leave such as military leave, personal leave, and holiday leave, which
is utilized for intrigued in travel, investing expanded time with family and companions,
or seeking after volunteer interest or additional education.(U.S.)
How is HRM addressed in Starbucks locations outside of the USA?
Starbucks implements good human resource practices for its own sustainability. Starbucks has
constantly review human resource practices used in each of its geographic area and have adhere
to them as such, employees are always satisfied and treated fairly. In fact, Starbucks has a
recruitment department that ensures that the very best talents are attracted to the company. The
company has an open recruitment process so that it can avoid complaints about different and
diverse applicants.
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How has the Starbucks responded to Globalization?
Global expansion is fundamental to successful companies; Starbucks is no
exception. While Starbucks was exceptional in its domestic market, the leaders of the company
knew they would have to exploit globalization and expand the company to foreign markets to
completely utilize the potential that the company had. In 2003, Starbucks rapidly expanded into
foreign markets and started to advance into the world-wide company we know today. As
globalization has made a difference to establish Starbucks as an international company, the
company has run into issues. These issues emerged both internally, inside the company’s
international business model, and externally, in the form of foreign competition. Rival coffee
shops started replicating Starbucks’ business practices, name, and even its company
logo. Starbucks had to utilize intellectual property laws to dispel customer confusion between
itself and competitors.
When Starbucks first expanded internationally, it utilized the same forceful business
model that it had created in the US, but soon realized that the same tactics that had worked to
establish the market in the domestic market were not favorable to international expansion. In
addition to culture conflicts between retail practices of the organization and different regions,
numerous cities opposed the establishment of Starbucks to protest globalization on a larger scale.
Due to this resistance in some areas, Starbucks has had to set up ways to adapt to foreign
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countries and seek the support of the residents of those countries. Starbucks does so, and does so
well, by listening to its customers. Starbucks employed different strategies to deal with
globalization and the culture and needs of the different nations were always at the forefront of
these plans. Starbucks is internationally recognized because of its ability to cater to customers’
needs based on the geographic location, culture, lifestyle, age, and gender.
How has the Starbucks managed organizational change?
In 2019 Starbucks was in the process of making “significant changes” to its
organizational structure which include corporate layoffs, according to an internal memo sent to
employees by CEO Kevin Johnson. He explained that the executive leadership team will be
working with supervisors to find ways innovating faster in a new retail environment. Based on
this change some roles where consolidated, some will be shifted and there will be some nonretail layoffs. Starbucks has been struggling with sales in the US for several quarters. Starbuck
increase division from 2 to 4 which established a customer centric field support structure which
enables teams to focus on partners, customers and coffee. Each division was led by a senior vice
president, reporting directly to the Us president. As a result of the changes Starbucks some of
Starbucks partners and managers may have new roles. Starbuck is a very strategy company as
such they respond to change promptly and efficiency which is the reason for its success over the
years.
Competencies and recruiting the right talent.
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Recruiting is the process of employing new people to work for a company or
organization. Starbucks recruitment is divided into two section which are Support Centre and
Retail. At Starbucks support center, career opportunities span a wide range of functions and
departments. Departments include finance, information technology, supply chain, marketing, PR,
human resources. On the other hand, for the retailing, Store Managers and assistant Store
Managers direct the day-to-day operations of each Starbucks location. Store management
positions offer a incredible career experience for individual with past experience in retail
management, or for baristas who desire increased responsibility.
Selection is the method of gathering data about job candidate to choose who ought to be offered
a job. Starbucks will be considering profoundly of candidate’s quality. During the selection, to
test the candidate’s questions will be asked concerning their preference of drinking coffee or not.
This is a way in which Starbucks will find people who match their values of liking coffee.
Training is developing skills, experience and knowledge employees need to perform their jobs
and improve their performance. In this training session, employees are instructed about coffee
and how to do well in satisfying the clients. The culture of Starbucks clearly states itself in three
‘C’s, which are Coffee, Connection, Culture. Within the training program, the employees are
well prepared to recognize coffee, and they are instructed to communicate well within the
company. There is one or more training every employee needs to acquire within 80 working
hours in Starbucks which are:

Mastering the knowledge of coffee competently.
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
Sharing the information of coffee with other people.

Explain why Starbucks is the best.

Mastering coffee beans, types of coffee, additives, growth region, baking and packaging.

The right ways to smell and taste the coffee.

Mastering how to describe taste of coffee.
Conclusion
I think the company encompasses a great approach to Human resource management. This is
because it has not had any Human resource issues in its operations. In fact, the company has a
very high rate of employee productivity. As such I will continually support the company as it
enhances its operations within the unpredictable and competitive market.
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References
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Starbucks 2013 10-K Form for FY ended on September 29th, 2013
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Starbucks 2013 10-K Form for FY ended on September 29th, 2013
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