Organizational Behavior
Final Project
Leadership Analysis
Howard Schultz & Lee Kuan Yew
Team Number 4
Members:
Goncha Aliyeva
Zeynab Akhundova
Elgun Shikhaliyev
Madina Kazimova
Rovshana Hajiyeva
Toghrul Mahmudlu
Ilkin Hajiyev
Introduction
This paper is about the topic of leadership, specifically looking at how power and communication play a
role in shaping effective leaders. To do this, we’ll be comparing two very different and influential
figures: Howard Schultz, the former CEO of Starbucks, and Lee Kuan Yew, the founding father of
modern Singapore.
Why did we choose these leaders?
Howard Schultz is a name we all recognize from the Starbucks brand. Under his leadership, Starbucks,
which was initially only a few coffee shops, expanded to thousands of stores worldwide. Two main
features of Schultz’s leadership were empathy and innovation. He believed in putting people first,
whether they were customers or employees whom he referred to as “partners.”
Lee Kuan Yew, on the other hand, took on an entirely different path of glory. He transformed Singapore
from a struggling nation into one of the most successful countries in the world. His leadership was
driven by vision, discipline, and a unique conceptualization of progress.
The focus of our presentation is on two big ideas:
1. Power—how leaders gain it, use it, and maintain it.
2. Communication—how leaders connect with people, inspire them, and build trust.
To elaborate on these concepts further, we will also look at leadership theories. For Schultz, we will
touch on Transformational and Servant Leadership Theory, which is about inspiring change and building
a shared vision. For Lee Kuan Yew, we will use Transformational and Fiedler’s Contingency Model,
which highlights how a leader’s effectiveness depends on adapting to the situation.
HOWARD SCHULTZ
Life Story & Career Development
Howard Schultz is widely regarded as the visionary leader who transformed Starbucks from a small local
coffee roaster into one of the most recognizable global brands. His career, shaped by resilience, creativity,
and a strong sense of purpose, offers an inspiring example of how effective leadership can not only drive
business success but also promote social responsibility. Schultz’s leadership style and communication
strategies have been central to Starbucks’ growth and reputation, making him an influential figure in both
the business world and the realm of corporate social responsibility.
Early Life and Background
Born on July 19, 1953, in Brooklyn, New York, Howard Schultz came from a working-class family. His
father, a truck driver, faced significant financial struggles, and these early challenges profoundly
impacted Schultz’s worldview. Growing up in an environment marked by hardship motivated Schultz to
work hard and seek ways to create a better future for himself and his family. He attended Northern
Michigan University on a football scholarship, earning a degree in communications, which would later
serve him well in his leadership roles.
After graduation, Schultz worked in various sales and marketing positions, gaining valuable experience
in business. In 1982, he joined a small Seattle-based company called Starbucks, which was focused
primarily on selling coffee beans and equipment for home brewing. Schultz was hired as the Director of
Retail Operations and Marketing, and it was during a trip to Italy that he experienced the idea that would
eventually change the course of Starbucks’ history. In Italy, Schultz was captivated by the café culture,
where coffee shops were social gathering spots beyond simply selling coffee. Inspired by this, Schultz
envisioned transforming Starbucks into a coffeehouse—a place where people could relax, socialize, and
enjoy a unique coffee experience. This vision would serve as the foundation for Starbucks’ future
success. (Schultz, 2011, pp. 10–20)
Key Milestones in Schultz's Career
1.Expansion of Starbucks:
Schultz’s first significant leadership decision was to turn Starbucks into a coffeehouse chain, not just a
supplier of coffee beans. In 1987, Schultz bought the company from the original founders for $3.8
million. At the time, Starbucks had just a few stores in Seattle, but Schultz had a vision to expand and
create a global brand.
Under his leadership, Starbucks expanded rapidly, both nationally and internationally. By the early 1990s,
Starbucks had opened locations in cities across the U.S., and by 2000, the company had
expanded globally, reaching markets like Japan, the U.K., and China. Schultz’s focus on customer
experience, quality coffee, and creating a “third place” for people to relax—apart from home and work—
helped build the foundation for Starbucks’ worldwide success. (Schultz, 2011, pp. 25–35)
2.Crisis Management during the 2008 Recession:
The 2008 financial crisis presented significant challenges for many businesses, and Starbucks was not
immune. As the economy tanked, consumer spending decreased, and Starbucks saw a decline in sales
and store traffic. Schultz, who had stepped down as CEO in 2000 to focus on other projects, returned to
the company in 2008 to help steer it through the difficult period.
Schultz’s leadership during this time was marked by a strong focus on rebuilding the brand’s core
values. He closed underperforming stores, cut costs, and focused on improving the quality of customer
experience. He also implemented several key strategies, such as investing in employee benefits and
improving the company’s supply chain. Schultz communicated openly with employees about the
company's challenges, reinforcing a sense of shared purpose. He made difficult decisions, including the
closure of 900 stores, but was transparent about why these decisions were necessary for Starbucks to
survive and grow in the future. (Schultz, 2011, pp. 145–190).
3.Implementation of Ethical Sourcing and Employee Welfare Programs:
Schultz’s leadership is also defined by his commitment to ethical sourcing and social responsibility. In
the 1990s, Starbucks introduced its Coffee and Farmer Equity (C.A.F.E.) Practices program, which
aimed to ensure that the coffee the company sourced was produced under fair labor conditions and in an
environmentally sustainable manner. This was one of the first initiatives in the coffee industry to focus
on sourcing coffee ethically, and it set a new standard for corporate responsibility.
Schultz believed that treating employees well was essential to the company’s success, as happy
employees would lead to happy customers. His approach to leadership and communication emphasized
inclusivity and respect for workers, which helped create a strong, loyal workforce.
Howard Schultz’s rise to leadership and the key milestones in his career highlight his unique vision,
determination, and commitment to both business and social responsibility. His leadership was crucial in
expanding Starbucks into a global powerhouse, particularly in times of crisis. Schultz’s ethical approach
to sourcing, employee welfare, and transparent communication style have shaped Starbucks’ success and
influenced the broader corporate world. Through his efforts, Schultz has demonstrated that effective
leadership is not just about profitability, but also about positively impacting people and communities
worldwide. (Schultz, 2011, pp. 210–240)
Leadership Theories Applied
Transformational Leadership
Schultz practiced Transformational Leadership, in which the main leader can persuade the team toward
the vision. In his writings, Schultz believed that Starbucks was not merely about making coffee sales but
about providing people with a place to go, to feel at home, and to enjoy great coffee. He thought this
vision would not only help the business become successful but also help the communities.
Of all the aspects of Schultz’s leadership, the most impressive was that he inspired people to follow him.
He did not only establish targets; he ensured that people were aware of why they needed to be part of
transforming Starbucks into just a coffee retail store. His passion was contagious. For instance, “It was
not the calling of coffee, but the calling to try to build a company that my father never got a chance to
work for,” said Schultz. (Gallo, 2014) This proved that he kept his eyes on the company’s people, the
employees, and the consumers rather than the item. He was able to share his passion for Starbucks’
mission with people who report to him and empower them to embrace the organizational objectives.
Schultz was not only motivating his team and challenging them, but he also called for creation. He was
always in the process of change and seeking to enrich and add value to the Starbucks experience through
offering new products, enriching the customer experience, or changing the workplace for the better. His
approach especially toward his subordinates encouraged them to embrace change, think, and collaborate
to actualize the mission of the company.
Servant Leadership
The other major part of Schultz’s leadership was in his approach to Servant Leadership, which is
focusing on the needs of others before your own. Schultz didn’t think of himself as a boss but rather saw
himself as one who was there to serve his employees. He writes, “From the beginning of my
management of Starbucks, I wanted it to be the employer of choice, the company everybody wanted to
work for.” (Sachs, 2023) He reflected this in his giving stock options to employees referring to them as
“partners” and letting them feel like they owned the company. He also made it possible for part-timers to
have health benefits, very uncommon in the industry at the time. Schultz writes, “The only way to win
the confidence of Starbucks’ employees was, to be honest with them, to share my plans and excitement
with them and then follow through and keep my word, delivering exactly what I promised – if not
more.” (Sachs, 2023). The leader showed he cared for his employees’ input and was willing to remove
obstacles that might prevent their joint well-being or success
Schultz's background influenced how he led as a servant leader. He knew what it was like to not know if
you would have good job security. Schultz was passionate about treating his employees well because his
father had to work long hours in low-paying jobs. When the company got into trouble, like with the
2008 financial crisis, Schultz always protected his employees. For example, he did not lay people off,
but retrained them, demonstrating how much he cared for their wellbeing. Servant leadership is defined
by his focus on people, even in the face of adversity.
Consideration Leadership
Schultz was very good when it came to considering leadership and taking care of the team's personal and
emotional needs. He wasn’t just a leader; he was a mentor who cared about his employees. He listened
to them, helped when needed, and showed appreciation for their hard work, building strong, lasting
relationships with his team.
For example, when Schultz introduced benefits for part-time workers. This was very rare at the time in
the food service and retail industries. Respect for the well-being of your employees is what Schultz
chose to do, which made them feel appreciated and valued, which in turn boosted morale and loyalty.
Additionally, with the College Achievement Plan, where he didn’t simply provide financial aid for
tuition; he ensured employees who received the aid were encouraged to pursue higher education while
working for Starbucks. Removing the financial barriers and making learning available, he helped
employees reach personal goals that matched their professional development. Besides getting results, his
leadership was also about creating an environment in which employees were cared for and appreciated.
This focus on relationships helped create a unique company culture at Starbucks and in doing so, helped
create a unique company culture for Schultz. Loyalty, translated into better customer service, employees
felt like they were part of something bigger than just their job. By focusing on relationships, Schultz
created a space where people wanted to come to work, every day.
Communication Style
Starbucks believes that one of the key aspects of making the business successful is creating a healthy
and positive work environment. As Howard Schultz once stated, “I tried to make Starbucks the kind of
company I wish my dad had worked for. Without even a high school diploma, he probably could never
have been an executive. But if he had landed a job in one of our stores or roasting plants, he wouldn’t
have quit in frustration because the company didn’t value him. He would have had good health benefits,
stock options, and an atmosphere in which his suggestions or complaints would receive a prompt,
respectful response.” From this statement, it is evident that for Schultz, one of the crucial factors for
creating such an environment is ensuring the application of quality communication within the company.
Besides his exemplary leadership methods, Schultz was also known to be an excellent communicator
within the Starbucks company. He stated that he views his role, in part, as communicating a vision for
the company (George & McLean, 2007). According to him, the ability to visualize the realization of
your dream and effectively transfer this idea to others is an essential skill for the growth of the company.
Downward Communication
Howard Schultz always valued his relationship with his employees. One of the key aspects where the
significance of employee-CEO relations for him could be observed was the way he addressed his
employees. Unlike many senior leaders in other companies, he referred to his workers as ‘partners’
which, stresses the importance of mutual respect for him.
Moreover, he ensured that his communication with his subordinates was not in a “one-way nature”. To
measure the satisfaction level of the partners and to allow them to voice their opinions and ideas,
Starbucks management utilizes a “written communication channel” by conducting regular attitude
surveys. According to these surveys, employees know what is expected from them at work; they believe
that someone at work cares about them. It displays that the goals and instructions are conveyed in a very
detailed manner and presence of emotional bounding within the company.
Partners wishing to voice concerns about the actions of their co-workers or the business policies and
practices of Starbucks can call our 24-hour Starbucks Helpline. Partners who call the Helpline,
anonymously if they wish, are interviewed by non-company personnel, and a confidential report is then
prepared and forwarded for investigation and executive attention.
In addition, Schultz understands the effectiveness of oral and face-to-face communication. Therefore, he
tries to visit at least 30-40 stores a week to grant the workers a chance to converse with the “top guy” in
the company. Which can be interpreted both emotional sharing and effective downward communication.
Upward Communication
Howard Schultz is also a successful communicator in times of crisis. In the early 2000s, the decisions
made by the senior management of the company started to deviate from its fundamental values. In an
effort to increase efficiency, many contracts were signed, which made them partially lose control of the
internal processes. At the same time, employee training was neglected, which resulted in the decline of
the coffee quality. According to founder Howard Schultz, the fast expansion made Starbucks lose its soul
forgetting to focus on serving one customer, one cup at a time (Schultz, 2011).
In the Biennial Analyst Conference, it would be the first time, that Starbucks’ management had to
appear before the shareholders with the company underperforming. Therefore, it was crucial to “show
the Street how we would rebound. Not by overpromising or making bold predictions, but by confidently
reaffirming that we understood and were correcting our problem” (Schultz and Gordon, 2012, p. 221).
By effectively using “emotional sharing” and “persuasive” communication skills, the executive team
successfully addressed the challenges faced by the company. Schultz, speaking candidly, expressed his
renewed conviction in Starbucks' purpose and potential. Each executive contributed to the presentation,
outlining various strategic actions. The new CFO, Troy, discussed $400 million in cost-saving efforts,
including $200 million in savings for 2009. EVP of Marketing, Michelle Gass, presented future plans
based on customer research, while CMO Terry Davenport focused on the new Rewards Program.
The focus on Starbucks’ core foundation and innovation to emerge stronger from the crisis demonstrates
effective upward communication, ensuring that key stakeholders, including shareholders and analysts,
were informed of strategic priorities and long-term goals. The presentation was well-received, with
analysts praising the cost-saving measures and balance between premium positioning and customer
value. Despite some criticisms, such as concerns over competition and advertising, Starbucks' share
price rose slightly. Schultz believed the conference was successful, noting that he had presented the
company’s strategy with authenticity and conviction, emphasizing the fine line between confidence and
overpromising. By the end of the Conference, the stakeholders were convinced to trust Starbucks’ longterm strategies and the company’s stock price rose.
Lessons from Schultz
How Communication Fosters Trust and Loyalty
One of the most important lessons from Schultz’s leadership is how communication can create a culture
of trust and loyalty. Schultz was known for being open, honest, and transparent with both his employees
and customers. During tough times, like the 2008 recession, Schultz communicated openly about the
challenges Starbucks was facing and the tough decisions the company had to make. This openness built
trust with employees and showed that Schultz was committed to the long-term success of the company,
not just immediate profits.
He also made a point to engage with employees (called "partners" at Starbucks), listening to their
concerns and valuing their input. This inclusive approach created a loyal workforce, as employees felt
respected and empowered. In turn, this loyalty extended to customers, as people appreciated the
company’s commitment to quality, fairness, and social responsibility.
The Role of Storytelling in Leadership
Schultz used storytelling as a powerful tool to inspire and motivate others. Whether speaking to
employees, customers, or investors, he often used stories to convey the company’s values, vision, and
mission. For instance, Schultz frequently shared the story of his own humble beginnings and how he
wanted Starbucks to be a place where people could gather and connect. By telling his story, Schultz
made his leadership more relatable and connected his personal values to the company’s goals. This
storytelling helped employees understand and embrace the larger purpose behind their work, which in
turn motivated them to work toward the company’s shared vision.
Key Takeaways for Aspiring Leaders
1. Be Transparent: Clear and open communication is essential for building trust. Leaders should be
honest about challenges, decisions, and expectations.
2. Build Relationships: Effective leaders connect with their teams on a personal level. Schultz’s ability to
make employees feel valued created a strong culture of loyalty.
3. Use Storytelling to Inspire: Great leaders don’t just give instructions—they share stories that resonate
with others, making the company’s mission come alive.
4. Lead with Purpose: Leadership is about more than profits. Schultz showed that having a clear sense of
purpose and values can inspire employees and customers alike, leading to long-term success.
LEE KUAN YEW
Early Life and Legal Career
Lee Kuan Yew was born on September 16, 1923, in Singapore to a middle-class family. He excelled
academically, attending Raffles Institution, where he stood out as a top student. Lee moved to England
to study law at the University of Cambridge after World War II. He graduated with high honors, and a
double first-class degree in law. Lee returned to Singapore in 1949 and worked as a lawyer. His interest
in politics grew as he worked with trade unions and advocated workers’ rights.
Key Milestones
Independence of Singapore (1965)
Independence of Singapore (1965): In 1954, Lee co-founded the People's Action Party (PAP). He led
the party to victory in 1959, becoming Singapore's first prime minister. Singapore was initially part of
Malaysia in 1963, but political and racial tensions led to its separation in 1965. So, Singapore gained
independence under his leadership. Lee's vision and pragmatic approach lent stability to the fledgling
republic.
Economic Reforms and Infrastructure Development
Lee focused on building Singapore’s economy by attracting foreign investments and transforming it
from a struggling economy to a global hub. He established the Economic Development Board (EDB) to
attract foreign investment and the Housing and Development Board for affordable public housing and
modern infrastructure. Under his leadership, Singapore developed strong manufacturing, finance, and
trade sectors.
Establishing a Corruption-Free Government
Lee enhanced the Corrupt Practices Investigation Bureau through tough anti-corruption measures. These
again made Singapore one of the most non-corrupt countries in the world.
Leadership Theories Applied
Fiedler’s Contingency Model
This theory suggests that a leader’s style should fit the situation. Lee’s task-oriented approach was
perfect for Singapore during its challenging early years. His focus on solving immediate problems, such
as unemployment and housing shortages and pragmatic, clear goals—such as economic development
and social stability—helped address Singapore's limited resources and socio-political challenges. His
clear and direct leadership helped Singapore achieve stability and progress.
Situational Leadership
This theory shows that leaders shape their leadership manner according to the demands of the time. During
the early years of Singapore, firm and sometimes harsh leadership was the way to respond to and manage a
crisis. As Singapore developed, he embraced a more consultative style, empowering institutions and
ensuring sustainable governance and continuity. Lee Kuan Yew converted postwar poor little Singapore
into a global success story. His methods and vision are an example of how strong leadership can bring
about remarkable change. Scholars of the Singapore phenomenon acknowledge that Lee played a critical
role in this revolutionary transformation. His principles and policy contributions to leadership in
developing the country built the spine on which success has been achieved. Throughout his political career,
Lee advocated strong political leadership and was an example of a leader who must set the right national
goals and find effective ways to achieve them (Mahbubani, 2017).
Transformative leadership
Lee Kuan Yew's transformative leadership was based on building trust through efficient and highperformance government, modernizing Singapore, and ensuring its global competitiveness. His
emphasis on visionary leadership aligned with the principles of transformational leadership, where
leaders inspire change and drive national progress. Lee believed that the central government could
significantly drive national progress by setting clear goals, mobilizing resources, fostering a businessfriendly environment, and attracting foreign investments. Another very important component that
distinguishes Singapore’s government agencies and ensures their professionalism is their practice of
continuous improvement. Lee argued that to recruit and retain the best professionals, they must be well
compensated for their work. A fundamental aspect of Lee's transformational leadership was his
unwavering approach to combating corruption. He considered corruption a socially infectious problem that
diminished public trust and obstructed modernization. Through a visionary approach, strict governance
standards, and a steadfast dedication to institutional integrity, Lee Kuan Yew demonstrated how
transformative leadership can propel national advancement and cultivate trust within a community.
Consolidation of Power
The reason why Lee thought about the necessity for creating this party (PAP) is that he was willing to
become independent from the British and to gain self-control of Singapore. Following this success, in
1959, he was elected as the first prime minister in Singapore and this election was considered as the
beginning of the transformation of Singapore. The main cause of his victory is effective tactics to
influence others and establish its legitimacy. For example, he frequently used rational persuasion since
he had been introducing logical reasons and proof-based arguments to the Singaporeans to meet their
needs such as freedom. He also motioned several destroyed impacts on this country’s welfare because of
acting per the British colonial’s desire. Besides, he provided individuals with evidence of whether a
country continues to become dependent on them can ruin the country or not, triggered by a lack of
opportunities for citizens, the economics of the country, the education system, being under the influence
of communism by Britain that will cause not being met the needs of the Singaporeans. Another tactic he
used is legitimacy because he had established the organizational rules and structure to manage all the
processes. Thanks to these actions, he gained authority and legitimacy which helped to create a modern
and more developed Singapore. Turning to inspirational appeals, Lee is well known as a motivator since he
was able to encourage people based on their values and hopes for the future of Singapore. He had
promised to ensure freedom of speech, action, and so on to make it a more peaceful, modern, high-living
standards environment for the nation. Some other tactics were also used by Lee Kuan Yew which are
considered effective influential factors used by political people.
Other Concepts of Power
Lee Kuan Yew utilized numerous strategic policies in healthcare, the education system, and the
economic conditions of the country by implementing several actions. These contributions have caused
sustainability in global business and satisfaction of the infrastructures by people which are generally
assumed to have long-term development. The individuals had always taken Lee’s side. Thanks to his using
coalitions from nine influence tactics of power, Lee enlisted citizens to work together to be aware of the
significance of collective support.
Furthermore, Lee considered education as a crucial sector for Singapore’s future success. His policies
introduced meritocracy that ensures chances for personal growth. The English language became the
main language for extending some opportunities to enter global marketing and effective communication
with this most known language. So, Lee utilized inspirational appeals to encourage
people to be educated which is related to the target’s value. This exemplifies referent power, as Lee
inspired people through his vision and values, motivating them to prioritize education for personal and
national success.
Turning to the healthcare part, Lee believed that developing the medication sector would improve the
life standard of Singaporeans. Therefore, in 1984, his organization introduced the Medisave system. The
main purpose of this system was to save the expenses of the individuals for the medication.
Another factor that Lee contributed to the history of Singapore is the great influence on the economy. He
was more likely to pay attention to the taxes, debits, credits, etc. of the economy, which is why he
created the Economic Development Board (EDB) which caused beneficial opportunities such as
attracting other countries to his trade and advancing industrialization. Consequently, this step plays a
vital role in the ongoing success of the economy of Singapore. Furthermore, Lee had generally used the
exchange tactics as well because he had been offering favors and benefits in return for support from
citizens, which is why he broke some taxes to push several businesses' well-being. This is another
example of reward power, as these incentives motivated businesses and individuals to align with his
economic vision.
Most people have discussed and admired Lee Kuan Yew’s leadership in the late 20th and early 21st
century. He had well-organized and pragmatic policies and laws to be aware of every action and to
create a long-term, sustainable, and developed country. Therefore, he focused on not only the structure
and basis of the government but also on building trust with people. This demonstrates legitimate power, as
his authority stemmed from his position and the structured rules he implemented. Whereby he
implemented several strict rules, such as controlling the media, and his policies, improving economics,
education, healthcare, etc., he also persuaded the Singaporeans to improve, having better conditions for
the country.
Lessons from Lee Kuan Yew
Balancing Authority with Accountability
Lee Kuan Yew’s leadership was a masterclass in combining authority with responsibility. He had a
strong approach, particularly his anti-corruption measures, where strict rules ensured integrity within the
government are excellent evident of it. This not only founded people’s trust to government but also
created a governance model where power was exercised with transparency. Leaders can learn from this
balance to ensure authority serves the greater good.
Vision and Strategic Planning
Lee Kuan Yew had a clear vision: to transform Singapore from a struggling city-state into a global
powerhouse. He achieved this vision with detailed planning and action. For example, he invested
heavily in education, making bilingualism a priority, and developed high-level frameworks such as ports
to attract businesses from abroad. His ability to connect long-term goals with little achievable steps is a
valuable lesson for anyone in leadership. Lee Kuan Yew’s leadership was not for a short-term goal, It was
an envisioned process of long-lasting nation with strong foundations.
CONCLUSION
Howard Schultz and Lee Kuan Yew are two leaders who acted in completely different ways, but their
results were equally successful. Schultz’s leadership in the corporate world was based on understanding,
creativity, and a strong sense of obligation to people within and outside the company. The
implementation of Transformational, Servant, and Consideration leadership styles helped Starbucks to
become loyal, trustworthy, and inclusive. Schultz was able to achieve clear communication by ensuring
that the employees understood that their personal values could be aligned with the company’s objectives
and goals while employees felt appreciated and motivated. His leadership proved that aligning company
values with employees' aspirations could lead to a stronger organizational culture.
In contrast, the leadership of Lee Kuan Yew in building up the nation was visionary, disciplined, and
tactically innovative. His pragmatic approach, supported by Fiedler’s Contingency Model and
Transformative leadership principles, enabled him to guide Singapore from a struggling city-state to a
global success story. Lee’s clear communication, anti-corruption measures, and commitment to strategic
planning cultivated trust, accountability, and national unity. His flexibility in his approach to leadership,
with power and accountability, made it possible to have lasting change in his nation.
Both leaders, though operating in different contexts—Schultz in a corporate environment and Lee in a
political one—demonstrated that leadership is most effective when grounded in clear vision, empathy,
strategic action, and trust. Their legacies show that whether in business or governance, true leadership
is about inspiring people, fostering communication, and driving progress for the greater good.
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