staff

Introduction

Starbucks has served as a milestone in the coffee industry and is a massive organization in terms of people employed and stores owned. At the current time it has revenue of $10.7 billion and owns 16,850 shops in 40 countries. Starbucks is clearly the world’s top coffee retailer, it employs 137,000 employees or “partners” as it likes to call them. Howard Schultz, the CEO of Starbucks, considers that ‘the tip of success in Starbucks is not coffee but employees’. He constantly builds upon the working experience of employees, providing chances of promotion, and treating workers as working partners is their way to operate sustainability. He firmly believes that the spirit of Starbucks is employees and feels honored about the value of Starbucks employees. Many theorists believe that “it is necessary to have a perfect education and training policy for better performance in a company” (Michelli, 2006). Despite serving in many countries, Starbucks has a similar organizational structure; as a result, it does not take into account the cross cultural determinants. It has been criticized for its approach; also because, employees of some countries like UK are not as satisfied as employees from Poland and Germany, thus Starbucks must make use of cross-cultural determinants in order to improve its management methords. One of the most proficient theory, the Hofstede theory states that the motivational factors of every country are different and thus must be looked into before a company, such as Starbucks sets its motivational methods. Along with Hoftsede it talks about Management and Motivation in reference to the Grid/Group Theory by Douglas, which strives to classify different cultures in relation to being hierarchist, individualist, egalitarian and fatalist. It also talks about the ‘Cultural Theory’ and ‘Organizational Theory’ in relation to Starbucks. This research attempts to access these theories in reference to Starbucks, and its motivational methods across nations. It looks at a comparison between the way Starbucks company treats or must treat its employees across UK, Poland and Germany.

Brief Overview

The Starbucks Company is a vast and well constructed multi-national, which serves in 40 countries. It has to keep in mind various cross-cultural determinant while bringing in its motivational schemes. However, it has been criticized for not taking into account, cross-cultural determinants when building its management cultural across countries. It is often assessed, that the employees of countries like UK, seem to be less motivated than employees from Poland and Germany. This paper talks about all possible schemes in relation to motivational theories, that can be adopted by Starbucks,chiefly the Hofstede theory. The factors of this theory are highly relevant and can be implemented in various ways to improve performance.

The first factor, Power distance can be defined as “the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally” (Hofstede 1991, p. 28). UK and Germany, are ranked as a low power distance society, where the relationship between bosses and subordinated is of interdependence, treating each worker equally and calling them ‘partners’. There, the managers of Starbucks are likely to place a greater importance on labors’ rights as compared to managers in Poland, which ranks as a high power distance country. However, in Poland there is a hierarchical social system, thus, it is said that their ‘ideal boss is a benevolent autocrat’.

Another factor of the Hofstede theory is Masculinity, the dominant values in society being material success versus femininity, caring for others and the quality of life. UK, Poland and Germany, are Masculine societies, driven by competition, achievement and financial success. In these countries, people’s performance is highly valued and people ‘live in order to work’. Starbucks too, beliefs in monetary based appraisals, it spends $300 million, on their employees’ welfare, much more than ‘they do on coffee beans’. Starbucks even gave its UK staff shares worth around ?4 million in their employee share scheme ‘Bean Stock’, followed by a Christmas cash bonus to staff worth ?1.5 million.

Uncertainty Avoidance, is another of Hofstede’s theories, it classifies countries into being high in Uncertainty Avoidance; having strict rules and resistance to changes like Germany and Poland and low in Uncertainty Avoidance; having fewer rules and being welcome to changes like UK. This is an important factor to look into a country when bringing in new innovations, and the planning of how the change has to be implemented. Managers of UK can bring in new ideas easily and with more enthusiasm while managers in Germany and Poland have to bring in changes subtely because people resist from breaking orthodox norms uneasy. Starbucks went through many changes when it merged with Giornale, it was welcoming to his employees’ involvement and included them in every change, by 1987, and employees at Starbucks had begun buying into the changes.

The theory includes a comparison between countries which have more, individualism everyone is expected to look after themselves and their immediate family against collectivism, and cultures in which people are bound into strong and cohesive groups. UK, Germany and Poland, are individualistic societies, where the route to happiness is through individual accomplishment. Here the company, in order to motivate its employees has to come up with schemes to provide them and their families’ advantages. The culture in Starbucks is of mutual advantage, thus workers usually do a fruitful job but all these factors must be kept in mind. Understanding all the cross-cultural determinants including these is crucial for a company which serves such a wide range of cultures; their observation along with development on these lines, must all be looked into, in order to bring out the best results.

Another theory is the Cultural Theory’ which talks about the importance of culture, stating that is is too ‘important to be left undefined and unrefined, and analysts need a deeper awareness of the anthropological and sociological frameworks’ when refining their management attitudes. It outlines the effect on culture in relation to common objectives, employee motivation and loyalty. Setting of roles, leadership, innovation, setting incentives, tolerance and accountability. The setting of the corporate cultural is extremely subjective of the countries cultural as a whole.

The Grid/Group theory is another theory based on cultural determinants, created by Mary Douglas, in 1996. It strives to study cultural relativism, which can be increased through a classification system taking into account ‘moral system, worldviews and ideologies’. This classification is built into two axes, based on individualism versus collectivism, including isolate/fatalist, hierarchist, individualist and sectarian groups. Each type is based on different classifications, power paradigms, moral values and individuality. In this paper, it is used to analyze, the classification of different cultures, such as UK, Germany and Poland into these categories, observing where their general workers fall, taking into account their employee, culture, market and forms of hierarchy.

The paper also talks about Organizational Culture Theory which is based on performance, ‘organization effectiveness, employee commitment, employee satisfaction, culture type, culture strength and culture congruence’. This theory is talked about in relation to Poland, Germany and UK; assessing them based on all these assesses their management and motivational factors. Even though Starbucks operates in different countries, its organization culture is often the same. This can be a harmful strategy, as due to differing cultural determinants, the company must change its strategies relatively. If this is not done, the motivation of employees can be lowered and the management can fail to do its job. Thus, this paper talks about all these theories and the possibilities that they provide to Starbucks, in modifying its strategies based on varying cross-cultural determinants.

Objective

This paper is set to analyze and evaluate the cross cultural determinants of Poland, UK and Germany, in order to find out the best ways to motivate the employees of those countries. It attempts to Find out the cross cultural determinants of these societies and the way the employees of these countries are treated.

Methodology

The Prime methodology used will be questionnaires that will be filled out by Starbucks employees across these countries. The questionnaire will be based on the Organizational Energy Questionnaire from ‘fully charged’ written by Heike Bruch, which is an instrument to measure a company’s energy state. The questions will include if the employees like what they do, do not have much drive feel relaxed in their job, feel angry in their job, feel enthusiastic in their jobs, have no desire to make something happen, speculate about the real intentions of management, have real care about company’s fate, are efficient in conducting work, behave in destructive manner, go out of their way to make company succeed and if they feel discouraged in their jobs. All these questions will convey about the general state of employees and their will be a separate questionnaire to observe the importance of cross-cultural determinants.

References

Heike Bruch and Bernd Vogel (2011). Fully Charged. United States of America: Harvard Business School Publishing.

HOFSTEDE THEORY- Poland, (2011) [online]. [Accessed 2012]. Available from:

<http://geert-hofstede.com/poland.html>.

Penny Bassett (2004). CHINESE AND AUSTRALIAN STUDENTS’ CULTURAL PERCEPTIONS: A COMPARATIVE STUDY, Victoria University.

Jim Boyer (2009). Understanding Hofstede’s Theory to Motivate Cross Cultural Employees. Business Insider [online]. (2011) [Accessed 6 May 2012]. Available from: <http://www.businessinsider.com/15-facts-about-starbucks-that-will-blow-your-mind-2011-3#at-300-million-starbucks-spends-more-on-healthcare-insurance-for-its-employees-than-on-coffee-beans-12>

Nicholson, N (1998) Encyclopedic Dictionary of Organizational Behavior Blackwell, pp 215

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Zoe Wood (2010). Starbucks’ staff set to get free shares in incentive scheme. 19 December 2010. Starbucks [online]. [Accessed 2012]. Available from: <http://www.guardian.co.uk/business/2010/dec/19/starbucks-uk-staff-free-shares-incentive-share>.

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Research Aims

Staff reductions are often required as part of the restructuring of an organisation, or as a response to economic conditions. However, the focus of the research here is to look at the long term and whether this type of staff reduction has an impact on the staff that remain, rather than focussing on those that leave. It is argued, at the outset, that the remaining members of staff are often overlooked, as they are perceived to be the “lucky ones”. Despite this, the basis of the research is that there will be both a psychological and practical impact on those remaining staff and these issues needs to be considered with much greater emphasis by the management team when looking at this type of restructuring. The aim is to provide a much greater understanding, by looking at Starbucks as an example, so that the management team is in a better position to deal with these types of situations in the future (Ferrie et al., 2001)

Objectives

In order to achieve this aim and to look at the broader issues associated with staff reactions, it is recognised that there will need to be several focussed objectives. Staff reactions are by their very nature going to vary, depending on a variety of subjective factors and by being clear with the objectives this will ensure that the overall aim remains the focus of the research throughout. The key objectives are as follows:

To gain an understanding of the initial redundancy or downsizing process, including the impact of the various selection processes; for example, the long-term impact is likely to be different where the redundancy is voluntary and therefore understanding the involvement of those staff retained in the process is the first step to understanding the reactions.

To understand the perception of individuals, depending on their role within the downsizing process; this recognises that there are multiple staff being impacted on when some are made redundant as well as the retained staff. These include the staff members who were not involved in the process, in the first place, as well as the managers, to make the ultimate decision.
To appreciate the psychological reactions and individual perceptions of those staff members who remain within the organisation, depending on the way in which this process is managed; for example, is there a difference between staff who are engaged with post-redundancy, or does it generally seem preferable to return to a “business as usual” mentality (Armstrong-Stassen, 1993)
Finally, the impact on the performance of the business over a longer time horizon will then be considered, looking at the immediate aftermath, as well as six months or even one year down the line, with potential reference to the ways in which staff members then react when the recovery process takes place. For example, it is potentially suggested in the literature that staff lack loyalty to the organisation and when general economic conditions improve may be more likely to look for alternative employment, as a result of the treatment they received during the recessionary period.
Research Questions

Two key questions emerge from this proposed research:

Which factors impact on and to what extent do they impact on the remaining employees, following a period of downsizing or redundancy
How can a management team look to mitigate the negative effects of downsizing and redundancy
Critical Review of the Literature

The literature in this area has already dealt with a variety of factors relating to redundancy and the impact on an organisation, but has not looked specifically at the longer term impact on the retained staff and the wider staff groups that may not have been directly linked to the restructuring and decision making.

Firstly, it is noted that research in this area recognises that staff members will typically understand that there are often periods where it is necessary to downsize or restructure, to such an extent that there will be involuntary redundancies. Klein (2009) states that, although staff will recognise this need, there is now also a recognition that the business managers are making decisions with the staff in mind, but are instead looking specifically at the immediate business demands. This shows lack of long term recognition of business sustainability, when it comes to retaining staff loyalty.

Research by Machlowitz (1983) looked at the emotions of the individuals, following on from a redundancy situation where they were survivors. This looked at the immediate aftermath, from an individual perspective, finding that individuals typically felt emotions of guilt or isolation, as well as a feeling of betrayal, where they felt that the process had not been undertaken completely fairly. Research from Brockner et al. (1985) looked at a laboratory experiment where students were subject to “lay offs”, finding that feelings of inequality were emerging and a sense of disgruntlement happened where it was felt that the relationship between the individuals was in some way unfair. This indicates that where there is a redundancy situation, the vitally important aspect to consider is the process of the downsizing, rather than the actual downsizing itself. Anxiety also ranked as a driving factor, as there was the concern that others would be made redundant, in the future. These perceptions and fears potentially result in efficiency within the organisation reducing and the staff then being more prepared to look towards other locations for their long term employment (Hughes, 2000).

The longer term impact of staff reduction and downsizing remains largely unexamined and the purpose of this paper is to look at how these activities can have an impact on the longer term operation within the business, by understanding the way in which the surviving individuals react (Cascio,1993). Further research is also required to ensure that the management team understands the impact of the way they handle a downsizing process and that this can have a direct and lasting impact on the success of the business, in the long run.

Industry background

In order to explore this issue in more detail and to create a relevant analysis, Starbucks is being looked at as a case study. Starbucks presents an interesting opportunity for analysis, as it has risen very rapidly from its first store which opened in 1971 to an organisation that has stores in nearly 21,000 locations across the world. Despite this, during the last ten years, the store has actually reduced its numbers, in the wake of the global financial crisis and lowering profits (Jennings, 2008).

Starbucks was not seemingly on the brink of disaster and in fact continued to open up other stores across the world, yet chose to close 600 stores across the United States, creating an interesting question as to how it impacted upon staff members where there were reports of a globally successful organisation that was still experiencing redundancies in their local area.

Arguably, the reason for the downsizing in the United States was the recognition that they had achieve the maximum growth available within the industry and they simply had too many stores. Takeaway coffee is largely a luxury product, with a limited number of affluent individuals able to partake on a regular basis. Despite Starbucks being a popular location for individuals and being recognised as an outlet in which individuals can choose to spend a large amount of time working or meeting friends, there are some limits to the number of customers who are prepared to pay premium price for good quality beverages.

With an industry essentially at saturation point, there needs to be a readjustment of strategy, yet there is likely to be a reaction from the employees who feel somewhat jilted having been involved in the dramatic growth and now suffering from their own success and hard work. This type of reduction is therefore particularly interesting, as it is a reaction within the industry, rather than something which can necessarily be attributed to the staff members themselves.

Research design

The research design for this paper is particularly important, as it involves looking at the feelings and reactions of individuals, thus making it a different type of research than simply collecting statistical data and then analysing this in a quantitative manner. In order to look at the reactions of individuals to a downsizing scenario, it is necessary to consider a sufficiently broad range of individuals, to gain any material understanding of exactly what is actually going on and the way in which individuals react. Different individuals will naturally react differently to a downsizing scenario. Certain individuals may even view this as an opportunity to further their own position, as there will be less competition within the organisation when it comes to securing their future; others will be much less positive, despite both individuals being part of the same process (Vahtera et al., 1997).

For this reason, the primary method of research will be a detailed case study of precisely what is happening within the organisation. This will include an understanding of the management theory behind the downsizing, before then going on to undertake a relatively detailed questionnaire with individuals from a variety of different locations, all of whom have been affected by the downsizing in some way, as well as completing at least two focus groups where individuals are brought together to discuss their experiences. This form of research is particularly important in this scenario, due to the fact that when individuals are left to openly discuss their thoughts and feelings, it is likely that they will open up and produce a much deeper understanding of their reactions (Weca, 2008).

Data Analysis Plan

Due to the qualitative nature of the research planned, the necessary data analysis also needs to be sufficiently open to looking at individual reactions and trying to find consistency of patterns of behaviours or thoughts. For this reason, the questionnaires will involve a quantitative analysis of the results, which will offer an understanding of any patterns being formed, before then looking towards the qualitative aspect of the research, in order to understand why certain responses have been obtained. By taking this two-stage approach, it is anticipated that the overall conclusions will have sufficient certainty, based on the quantitative analysis and will also be able to add to the understanding, through the use of individual thoughts and responses. A particular concern does arise, however, that there will be some limitations in the accuracy of the research. Firstly, the research focuses on survivors within a certain location or organisation and there may be an unwillingness of the individuals to be completely open about their thoughts and feelings, for fear of jeopardising their own position in the future. There are also likely to be limitations, due to the fact that this research is focusing on one organisation alone and downsizing may have different responses in different organisations (Stone, 2008).

By ensuring that any results obtained are dealt with anonymously, this will assist in some way to ensure greater accuracy. Nevertheless, there will always be the need to recognise that interviewing survivors of a redundancy process is potentially a skewed approach and some individuals are going to present an inaccurate picture, purely to further their own position, or at least to protect it. On balance, however, this overall analysis is likely to present the most balanced result and also establish some themes and generalisations which will be useful for the future.

Conclusion

In conclusion, understanding the impact of a downsizing programme on surviving staff members is crucial to the approach taken by the management team and any such situations in the future, either within the same organisation or for management teams of other organisations (Schwaner-Albright, 2008). Personal reactions to a situation can be somewhat difficult to appreciate and understand, due to the fact that individuals, by their very nature, will react differently to exactly the same factual scenario. The aim of this research, is to identify themes and generic strategies that may be useful to those looking at downsizing in the future, in order to ensure that surviving members of staff do not suffer from the negative effect of the redundancies and that the organisation is able to return to full efficiency, as soon as possible.

Time-scale for Project

This research is being undertaken over one academic year, although the plan is to undertake a full research and write-up within eight months. The following chart depicts the general approach that is being followed.

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Background, Aims and Objectives
Literature Review
Research Design
Research Collection
Analysis of Research
Writing Up
Revisiting and Checking

The majority of this research will involve the collection of primary data and the analysis of the research findings that have then been collected. It is anticipated that there will need to be several re-visits to the original data, as new information or themes arise. For example, analysing questionnaires will provide a strong starting point for the focus groups, but following the focus groups, it may then be necessary to go back to the questionnaires to further explore certain key issues. It is for this reason that the research collection and analysis of research findings takes up such a substantial part of the time allowed.

There is a degree of flexibility in this process and the research will be sufficiently flexible to ensure that the key points arising from both the case study, conducted as part of the literature review and the research collection, is able to take a longer period of time, if required.

Resources

As noted previously, the research is focusing entirely on the experience of individuals within one organisation. Therefore, good access to those individuals will be an essential element of ensuring that this research is conducted in sufficient depth. It is also noted at the outset that one of the main aims of this research is to provide the management team with guidance as to how it can better manage a downsizing operation in the future and therefore having management support in order to gain access to key individuals is a necessary resource.

Secondly, understanding the responses received and looking at existing literature will also require access to a variety of different publications, although this can largely be obtained through library facilities.

On balance, the key resource within this research is the ability to speak to a variety of individuals who have survived the downsizing process in Starbucks. This will require the management team to be completely supportive of the overall agenda. Individuals may be reluctant to speak about the subject or do not feel that the management team is supportive of this. No specific software is required for the analysis, although Microsoft Office suite including Excel will be useful, in order to collate the information received.

References

Armstrong-Stassen, M. (1993). Survivors reactions to a workforce reduction: A comparison of blue-collar workers and their supervisors. Canadian Journal of Administrative Sciences, 10: 334-343.

Cascio, W. F. (1993). Downsizing: What do we knowWhat have we learnedAcademy of Management Executive, 7: 95-106.

Ferrie, J. E., Shipley, M. J., Marmot, M. G., Martikainen, P., Stansfield, S. A., & Smith, G. D. (2001). Job insecurity in white-collar workers: Toward an explanation of associations with health. Journal of Occupational Health Psychology, 6: 26-42.

Hughes, J. (2000). Avoidance of emotional pain during downsizing in a public agency. Consulting Psychology Journal: Practice and Research, 52: 256-268.

Jennings, L. (2008). Starbucks to pull breakfast items, shut 100 units, put focus back on java. Nation’s Restaurant News. [Online Version] published 11th February 2008, reproduced in bnet.com, available from http://findarticles.com/p/articles/mi_m3190/is_6_42/ai_n24267543 [Accessed 12/11/2014].

Kivimaki, M., Vahtera, J., Pentti, J., & Ferrie, J. (2000). Factors underlying the effects

of organizational downsizing on health of employees: Longitudinal cohort study.

British Medical Journal, 320: 971-976.

Schwaner-Albright, O., (2008). Tasting the future of Starbucks coffee from a new machine. The New York Times. [Online Version]. Published March 26th 2008, available from: http://www.nytimes.com/03/26/dining/26starbucks.html?_r?=2&sq=starbucks&st=nyt&oref=slogin [Accessed 12/11/2014].

Stone, B. (2008). Starbucks Plans Return to its Roots. The New York Times, [Online Version], published March 20th 2008, available from: http://www.nytimes.com/2008/03/20/business/20sbux.html?pagewanted=2&_r=1&sq=starbucks&st=nyt&scp=3 [Accessed 12/11/2014].

Vahtera, J., Kivimaki, M., & Pentti, J. (1997). Effect of organizational downsizing on

health of employees. The Lancet, 350: 1124-1128.

Weca (2008). Pay more/ stop reliance on Tips. Mystarbucksidea.com. Posted May 23rd 2008, available from http://mystarbucksidea.force.com/ideaView?id=087500000004hShAAI[Accessed 12/11/2014].

A truck that was transporting Takata Corp. air bag inflators and propellants at the center of a global recall exploded in Texas last week, killing one woman and injuring four other people, the auto parts supplier said on Monday.

The truck, operated by a subcontractor, was traveling to a Takata warehouse in Eagle Pass, Texas, early on Aug. 22 when an accident occurred, causing an explosion that incinerated a nearby home, local media reports said.

The truck “was involved in an accident,” Takata said in a statement on Monday. “According to preliminary reports, the accident caused a fire, which led to an explosion.”

Texas state officials did not immediately return calls for comment early on Monday.

A Takata spokesman in Tokyo said earlier on Monday the blast killed one woman and that the truck was carrying air bag inflators and propellants containing ammonium nitrate, a volatile chemical compound. These bags have in the past exploded and been linked to the deaths of at least 14 people, triggering the biggest recall in the global auto industry.

The force of the explosion damaged about 10 nearby homes, breaking windows and dislodging doors from their hinges, local media reports said, with rubble and truck parts found almost a mile away from the site of the blast.

Takata has a warehouse in Eagle Pass, which is near the Mexico-U.S. border, that stocks inflators manufactured in Monclova in Mexico. That plant has been confirmed as one of the sources of the company’s defective air bags.

Local media reports said the driver of the truck was a 20-year-old man who, along with a passenger, were able to escape from the truck before it exploded. However, a 69-year-old woman was killed when the blast occurred in front of her home, the reports said.

A two-day search was conducted to find the woman, but the search was called off after she was identified by dental records, local media reported.

More than 100 million vehicles worldwide have been slated for recall to replace Takata inflators, which in addition to the deaths, are linked to more than 150 injuries, mostly in the United States and involving Honda Motor Co. Ltd. cars.

Prolonged exposure of the defective Takata inflators to hot conditions has been found to cause air bags to explode with excessive force, spraying shrapnel into passenger compartments.

(Reporting by Naomi Tajitsu in Tokyo and Bernie Woodall in Detroit; Editing by Christopher Cushing and Bernadette Baum)