Ras Al Khaimah Women's College
BAS CIN
Lss 2063 Culture, Climate, and Values
Group Report
Starbucks
Prepared by:
Maryam Rashed Hasan Falah H00085718
Deema Saeed H00085574
Hala Ali H00085709
Suaad AlHammadi H00203904
Student Section:
AT3
Teacher:
Abeer Al Rasbi
Submission Date:
11-12-2012
TABLE OF CONTENTS
Introduction ……………………………………………...2
Introducing the company………………….…….….…3, 4
The company organizational and national culture….5, 6, 7
The company ethics ......................................................…8
Conclusions……………………………………….….…..9
References……………………………………………10, 11
Appendices………………………………………..…12, 13
1
INTRODUCTION
Four students have participated to create this report who is, Maryam Rashed, Hala Ali,
Deema Saeed and Suaad Al Hammadi. Respecting all other cultures no matter what they
believe in this is what we believe in.
Our research paper is like the sea the more you search about it the deeper you get into it,
all of us have gathered a lot of information about it and made interviews with some
people to have a better understanding about their environment and we used our book
materials that have been provided by our teacher.
As you go through our research paper you will get a better understating about the story of
Starbuck and how it was established from the begging until now, you will also get to
know about the organizational culture type where it had the most common type for big
organizations, secondly the practices the company use locally and internationally and
why they behaved the way they do depending on the country and its culture. You will
also get to know about Starbucks ethical issues that they have faced.
2
INTRODUCING THE COMPANY
STARBUCKS
Starbucks is one of the largest Coffeehouse Company in the world. Its first store opened
in Seattle, Washington in 1971. The founders of Starbucks are a literature major, Jerry
Baldwin had been an English teacher, Gordon Bowker was a writer, and their third
partner, Zev Sigel, taught history. None of them as aimed to build a business empire.
They founded Starbucks for one reason: They loved coffee and tea and wanted Seattle to
have access to the best. (Shai Fain Fall, 2011). They got the idea from the spiritual
grandfather of Starbucks who was Alfred Peet, a Dutch-man that presented America to
dark- roasted coffee.
The store firstly sold just coffee beans and coffee making equipment rather than the
drinks. After about 10 years, Howard Schultz is an American businessman and writer
(Current CEO of Starbucks) was hired as Director of Retail Operations and came to the
conclusion that they should be selling drinks rather than just beans and machines. He
couldn't convince the owners, so he went his own way to start the Il Giornale chain of
coffee bars in 1986. The next year, the owners sold Starbucks to Howard Schultz who
then renamed his Il Giornale locations to Starbucks and quickly started to expand. After
the successful in Seattle, the chain spreads across the United States and then
internationally. The first location outside of North America was in Tokyo and they still
have a sizable presence in Japan today. In the 1990s, Starbucks was offering stock
options to employees and went public. Starbucks today are in more than 17,000 stores in
55 countries around the world. Their biggest presence is still in the United States, with
11,000 locations. (Miss Emmie, 2012)
STARBUCKS LOGO
The Starbucks logo is considered one of the most recognized logos in the world. The
company’s logo was initially a wood-cut style image of a 2-tailed mermaid or siren, but it
has undergone a lot of changes over time. The original design had the mermaid with bare
breasts, but the modern version has become more stylized and her hair covers her body.
(Miss Emmie, 2012)
3
STARBUCKS PRODUCTS AND SERVICE
Starbucks has many of products, services and attractive advertisements that make its
company unique and attract its customer, examples of its products (Starbucks official
site):
 Bottled drinks such as energy drinks , refreshers, cold drinks, bottled vanilla and
mocha
 Tazo teas such as green tea, iced tea and tea latte
 Smoothies such as chocolate, orange, mango , and strawberry
 Kids drinks such as milk
Example of Services (Starbucks official site):
 Perfect Cup of Coffee
Starbucks coffee, even it’s more expensive than expected but satisfying customers
with its delicious taste and smell.
 Customer Satisfaction
Customer satisfaction is a very important point with Starbucks from entering to the
store until he leaves.
 Third Place
Starbucks marketing strategy from the beginning has focused on creating the “third
place” for everyone to go to between home and work. Creating this unique service for
people has been very important for the company which helped in attracted customers
strongly.
4
THE COMPANY ORGANIZATION AND NATIONAL CULTURE:
Organization culture types
Organizational culture is a structure of values, beliefs, and assumptions deemed
appropriate in thinking and acting inside an organization. Starbucks organization culture
type is the Role Culture from Charles Handy model (Charles Handy, 1976), because this
type of culture develops on a stable working environment where it’s also very suitable for
large organizations including Starbucks where it has more than 17,000 stores in 55
countries (Starbucks, 2012) In this type of organization culture type if an employee wants
to reach to the CEO it will take a lot of procedures and long time.
Each department function is clearly defined with certain role for an example the customer
services department they know what they are doing and they do it every day.
The main weakness for this type is that is harder to adjust to change but that is an
exaptation because in many branches mangers have the authority to do what they want.
Some specifications of this Role culture is its most common, based on job/role rather than
personalities. (Charles Handy, 1976)
Another organization culture that matches Starbucks is Deal and Kennedy organizational
culture model, for Starbucks its work hard play hard culture where the employees of
Starbucks take few risks with quick feedback, they serve the customers with the service
and products they need and they get the feedback quickly regarding how good the
products were and was the service satisfying. The main value is to provide the customers
with a quality products and services. (Deal and Kennedy, 1982)
5
Social practices that the company uses locally and internationally and
why the company behaves the way they do in the original country and
internationally:
The practices that Starbucks use locally and internationally differ from country to other.
Starbucks in USA , NewYork “Carryout orders are one of the company biggest money
makers” (Vitaliy Katsenelson, 2008) the profit that Starbucks gain from delivery orders
and takeaway is more than what they gain from customers who sitting inside the stores.
Almost people there prefer walking and taking public transporting than riding their own
car because it is faster therefore It is regular thing when you saw lots of people drinking
coffee and eating while walking or in the bus or train. No one will point a finger at you
and say this is not a good behavior because all people do the same thing. On other hand,
“in countries like UAE and France eating or drinking while walking in the streets is
considered extremely bad behavior (Vitaliy Katsenelson, 2008). and that’s because it is
not from table manner to eat or drink while walking especially to the old people surely
they will yell at you if you do that in front of them.
Back to USA Starbucks where carryout orders are source of profit as a result of that the
tables are limited since the numbers of the customers who sit in the USA stores are
limited. Other thing single tables are more than group tables. More than half of the
customers prefer to sit alone because of that USA consider as Individualism country refer
to Hofstede’s cultural dimensions. People there prefer to act individual compare to the
Starbucks in UAE where consider as collectivism people usually sit as group whether
they are a family or friends and that’s explained why group tables are more than single
tables.
In USA there are selected Starbucks shop have wine and beer in their menus (Tiffany,
2012). It is not an odd thing in USA because you can find these items in any public shops
there and it is not against the rules. On other hand, Starbucks in UAE does not have wine
and beer in their menus because it is against the rules to have these items in a public
places. Moreover, the religion in the UAE is Islam and alcohol is forbidden in Islam so
Starbucks as a public store have to act the way which let them gain local satisfaction. One
of my friends her name is Khawla and she had been in different Starbucks in many
6
countries refer to what she said there are lots of sandwiches which include pig meat in
London, Bangkok and other Starbucks stores and this is not available in UAE as well for
the same reason which consider against the rules and religion. Moreover, she said that
Starbucks in Saudi Arabia is divided the store in two sections one of them is for female
and the other one for men. As we know Saudi Arabia is country which is very strict in
rules especially if the topic about interactive women with men so Starbucks have to
follow the rules that Saudi Arabia provided to them wither was about advertisement or
services.
Starbucks In china have several difficulties to gain profit and the reason behind that is
china is a tea culture and Chinese until now treat Starbucks as western commodity and
doesn't go well with Chinese food, cultures and traditions, tea of course sounds a lot
better (May,2010). So Starbucks try to change the taste of the coffee hence that can fit
them and they produce their own Starbucks moon cake that fits Chinese standards and
culture. Moreover, they offer free Wi-Fi for the customers in some stores in China (May,
2010).The company wants to achieve their goals through long-term plans and operations.
From Hofstede’s cultural dimensions Starbucks in China consider as long term oriented.
They search, try ways to survive, think and plan for future and try any possible solution
can be benefit for them and all these to let Chinese accept Starbucks coffee. “Think
globally and act locally” (Nabil Freij, 2001).
7
THE COMPANY ETHICS
Starbucks provide an adorable coffee drinking experience. It has made coffee drinking a
social fact that brings consumers out of their homes to enjoy a drinking coffee in a social
atmosphere and have a rest from home and work stress. We are going to mention the
most three ethical behaviors and negotiate it.
Starbucks has turned coffee drinking into a way of life, as they mention in their official
website. Some customers think that the out looking of Starbucks is making customers feel
the need to drink a classier cup of coffee, a better cup of coffee than they drink in any
regular coffee shop. We assume that Starbucks has been ethical in its attempt to create a
better image to attracted customers it worth to mention that Starbucks is one of the most
ethical companies six years in a row. The result of our researches shows us that more and
more people, working longer hours, and having high levels of stress. The friendly service
and relaxing atmosphere of Starbucks helps to relieve people of their stress and clear their
minds from daily issues.
The second ethical issue is whether the workforce represents a proper ethnic diversity.
More that 50 percent, (Janet C. Richards, Ph. D) of Starbucks’ employees are of
Caucasian nationality. Although there is no fact showing that Starbucks is partaking in
racial prejudice, a more diverse workforce would help promote working environment and
it also will promote better business.
The third ethical issue is that Starbucks is one of the most expensive coffee franchises in
the world. The average cup of coffee at Starbucks costs $3.25, (Janet C. Richards, Ph. D)
compared to the average cup of coffee in any other coffee shop costing under the average
of cup of coffee in Starbucks a way too far. Moreover the prices are different from
country to another. We assume that it is perfectly ethical to charge as high a price as long
as people are willing to pay it.
8
CONCLUSION
What we learnt from the history of Starbucks is to put high expectation if we want to
reach our target and trying to improve the current level that we are in. Moreover, not
giving up as the three original owners they give up before trying the new business idea
that the director offered them.
Starbucks established many branches all over the world and this thing might be a good
step but I think Starbucks have to study and plan for a long time before opening new
branches in new countries. What I meant is studying the culture and the behaviors of the
people who live there. The reason behind doing that is to make the branch successful and
why I suggested this is because there are some branches that failed in making profits like
what happened in Australia and China and the reason is because there was a lack in
understanding their culture and people life style that had a hug effect as well.
9
REFERENCES
May.J(August 1,2010).Following Starbuck’s Example. Voices. Retrevied from
http://voices.yahoo.com/following-starbucks-example-1723233.html?cat=3
Katsenelson.V(may 1, 2008). Starbucks' Growth, Brand and Cultural Issues. Gurufocus.
Retrevied from http://www.gurufocus.com/news/26587/starbucks-growth-brand-andcultural-issues
Hsu.T(January 24, 2012). Starbucks to add beer, wine to menu at select coffee shops.
Latimes. Retrevied from http://articles.latimes.com/2012/jan/24/business/la-fi-starbucksbeer-20120124
Janet C. Richards, Ph. D.( 2011). The Challenges of Nurturing Graduate Education
Majors’
Ethic
of
Relational
Care.wtamu.
Retrieved
from
http://www.wtamu.edu/webres/File/Journals/MCJ/Volume%2073/Richards%20Janet%20-%20relational%20care.pdf
Starbucks.( 2012). Business Ethics and Compliance. starbucks. Retrieved from
http://www.starbucks.com/about-us/company-information/business-ethics-andcompliance
Starbucks.( 2012). Explore our menu. starbucks. Retrieved from
http://www.starbucks.com/menu/catalog/product?drink=tazo-tea#view_control=product
Miss Emmie(2012). History of Starbucks. coffee.org. Retrieved from URL
http://www.coffee.org/articles?article=153
Shai Fain Fall 2011-( March 30, 1971). Brief history of Starbucks and mission statement.
Blogspot. Retrieved from URL http://finenyc.blogspot.com/2011/09/playin-withstars.html
No name. Our Heritage. Retrieved from Starbucks: http://www.starbucks.com/aboutus/our-heritage
Minor, C. (2009, August 18). Organizational culture: The starbucks case [Blog post].
Retrieved from Littlegapanese website:
http://littlegapanese.blogspot.com/2009/08/organizational-culture-starbucks-case.html
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(2001). Enabling Globalization PLM. plm. Retrevied from
http://www.plm.automation.siemens.com/zh_cn/Images/GM_Enabling_Globalization_wi
th_PLM_tcm78-73539.pdf
Abeer.2012.nationalculture.powerpointslide18. Retrieved from
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APPENDIX
Starbucks CEO Howard
Schultz
Starbucks logo through change it the years
The original Starbucks store in Seattle
Starbucks Employees at Work
A Woman Sips a Starbucks Drink
Customers with Purchases
12
Customers Use Free Internet Access
Starbucks Products
Starbucks Posters
13