University of Chicago
Type of paper: Thesis/Dissertation Chapter
Analysis of Starbucks coffee company’ employees misunderstanding using organizational behaviour approach
Analysis of Starbucks coffee company’ employees misunderstanding using organizational behaviour approach
In every organization, organization behaviour is very important at all levels of employees from management to workers. Organizational behaviour deals the study of personality of individuals or characteristic of a group in an organization together with internal processes of an organization in order to determine the effectiveness of the organization or develop a solution (Hellriegel, & Slocum, 2010 p. 5). It helps people to interact, understand each other and find solution to behavioural problems, which culminate in improved working environment thus resulting to improved productivity. Therefore, it is important for management to ensure that effective employees accepted behaviour is maintained throughout the organization. It is important to understand organization behaviour so that decision making process and requirements of employees are addressed in the best ways that would not affect performance of a company (Mullins, 2013 p. 77). This paper will involve solving organization problem that faced Starbucks Coffee Company in 2005. The problem involved misunderstandings between employees and management resulting in communication problem in the company, which greatly affected its productivity in New Zealand (Mark, 2013 p. 10). The problem caused employees dissatisfaction and lack of motivation and thus giving poor services that in turn decreased production output and thus the company making losses. The misunderstanding between employees and management led to change of employees’ behaviour and so it was important to change their behaviour in order to realize the productivity of the company. Employees’ dissatisfaction and misunderstanding in an organization causes low commitment from employees thus affecting the performance of an organization (Hellriegel, & Slocum, 2010 p. 502). Although the problem could be addressed using various organizational techniques such as organizational development, organizational behaviour approach remained the best technique to find the solution of the matter so as to improve the effectiveness of the company.
Starbucks coffee company is a multinational corporation (MNC) that was started in Seattle in 1971 (Starbucks Coffee Company, 2014 b Company Information. Starbucks Coffee Company). The company specialises in coffee and coffee products. It has its stores established across the six continents with most of the market being concentrated in America, Europe and Asia. The company has more than 15,000 stores in more than 50 countries in six continents. The company performance and productivity increased steadily over years becoming among the best coffee selling company in the world. It continued growth and development led to opening of a new store in New Zealand in 1998 (Starbucks coffee company, 2014 a Extends the Starbucks brand into grocery channels across the U.S. Launches Starbucks.com). In New Zealand, Starbucks has more than 29 stores and over 3,700 employees serving more than 60,000 customers every day operating under restaurant Brands franchise (Starbucks Coffee Company, 2014 c Starbucks Coffee Company New Zealand; Restaurant Brands, 2014 About Us-Restaurant brands). Similarly, the store in New Zealand has improved growth and development giving it advantage in the market. However, poor management in 2005 led to it making losses due to misunderstanding between employees and management. Communication barrier caused by misunderstandings were the major causes of its poor performance (Phillips, & Gully, 2012 p. 497).
The company’s organization culture involves innovative products such as wifi coffee house and employees motivation through reward and attractive remunerations. Similarly, the company advocated for organizational culture where highly trained employees give high quality services to clients through exceptional performances that has rewards (Moncarz, Zhao, & Kay, 2009 p. 447). This culture has enabled the company to have competitive advantage and be able to command a large share of market in all its stores opened across the globe. New Zealand is one of the openings that has also had an exceptional growth and contributed to the growth of the company. However, the growth was halt in 2005 when the company suffered loss that was caused by misunderstanding between various levels of management. The misunderstanding was a result of a decision made by the management not to increase their wages to $ 12 per hour as employees had requested. The company has also been said to discriminate its employees by giving low wages as evidenced in Starbucks stores in New York (Bussing-Burks, 2009 p. 90). The decision affected the relationship between employees and management. Moreover, the performance of the employees was negatively affected and as a result the behaviour of the employees changed from the culture of exceptional performance and quality services to employees thus affecting the company’s performance.
In every organization, employees and managements operate under a pre-established behaviour that ensures its effectiveness. A positive behaviour must be maintained or improved so as to improve the performance of the company (Luthans, & Youssef, 2007 p. 337). Therefore, the management must ensure an optimum business environment is highly maintained so as to maintain the behaviour of employees’ at the most effective and productive level. Consequently, management should try to maintain their management behaviour because their behaviour can influence that of the employees (Gelf, Erez, & Aycan, 2007 p. 494). The combination of this behaviour towards the effectiveness of an organization ensures that a positive culture is maintained and that the organization is able to maintain its productivity, growth and development. Similarly, solutions to crises are easily laid off.
In order to address this problem, organizational behaviour models or theories were useful in encouraging the employees and management to change their behaviours and adapt their past or new behaviour that would ensure effectiveness in the company. Some theoretical approaches to this problem included systems, neo-human relations, decision-making, scientific leadership, human relations, and bureaucratic approach (Mullins, 2013 p. 43). The organizational behaviour models are important in addressing human behaviours and understandings their relations for effective implementation of changes that would ensure company’s productivity in maintained and improved.
Neo-human relations approach entails how an organization is able to define structures of management in a way that it is able to motivate employees through satisfying their basic needs and giving attractive remunerations. The model helps in addressing employees’ dissatisfaction (Mawhinney, 2011 p. 313). In addition, the approach focuses on the needs to address to the employees’ issues such as salary increment and other needs. An organization that uses this approach is able to maintain it high predominance and growth. A solution to the problem at Starbucks coffee company required management adapt to neo-human approach by making sure that the needs of the employees could be attended. The solution could be realised if management could increase plan to increase the salary of the employees to $ 12. The increment could be promised to be done in phases so that the financial performance of the company would not be affected. Consequently, employees’ motivation could b e achieved that could results in increased productivity of the company. However, leaving the situation without a solution would result in strikes, which would further affect the reputation of the company in addition employees reduced performance. Organization that does not understand the behaviour of the employees fails to meet the needs of employees and this may cause passive participation and resistance in place of work (Bloisi, Cook, & Hunsaker, 2007 p. 113). Strikes coupled to employees’ underperformance could greatly affect the company and can cause its collapse if an immediate action could be delayed. From this approach, the responsibilities of leaders are to make sure that the goals of workers are achieved so that they can facilitate the achievement of the company’s goals (Bratton, 2010 p. 200).
Decision making model would also be an important approach to address the problem with Starbucks coffee company. In decision making model, a decision that is arrived at is not a necessarily an optimal solution but a solution that benefits all the parties and enhance the performance of the company (Klein, 2008 p. 457). The decision making model optimise the change of behaviour that is goal oriented. The manner in which a decision is made is important in a company (Griffin, & Moorhead, 2013 p. 215). An organization that is able to make ethical decisions have high likely hood of succeeding and achieving high growth. Poor decision making results in poor management and misunderstanding between the management and employees and end up affecting the performance of the company negatively (Stein, 2010 p. 87). This is what was experienced in Starbucks Company in year 2005. The decision to decline to raise the payments of employees without a major reason or a proper communication caused the management to find themselves in a crisis of management and performance of the company. The problem can be addressed through ethical decision making process where all the stakeholders are involved in decision making (Punnett, 2009 p. 31). In ethical decision making, the views of the employees could have been addressed and that of the company ending up in a compromising situation where both parties issues are met in agreement.
The figure 1 above showing a decision making problem that helps an organization to limit unethical decisions that could affect the performance of the company. The decision to decline wage increment was supposed to follow all the steps while involving stakeholders and thus the decision would not have affected the employees’ behaviour.
The problem in Starbucks could also be addressed using scientific leadership model. In this model, the efficiency in work place can be monitored and adjusted accordingly using various leadership skills such as charisma (Nelson, & Quick, 2012 p. 443). The model is useful in understanding the objective and goals of the company so that every issue or problem is addressed in accordance to the goal of the company (Borkowski, 2011 p. 201). In this model, managers are the overall supervisors of the company and that they should make sure that the company does not lose for their mismanagement. For this reason, managers assign job to employees and monitor so that they are able to give an output of a quality work. Therefore, the management was responsible to manage the work of employees throughout so that they would have made sure that every employee was productive and thus preventing underperformances during the crisis period (Punnett, 2009). The approach makes sure that the goal of the company is always on the focus and so its growth is not compromised irrespective of the problem. Starbucks management had failed to utilize this approach and they left the company to be controlled by employees changed behaviour thus low performance. The model is important to every company that is facing employees’ performance crisis so that they performance of the company remain on focus.
The figure 2 above shows the model for scientific leadership models. The decision that is made is focused on the outcome as shown in the figure above. All the other factors should be considered ensuring that goal of the company is not compromised.
Human relations or organization behavioural theory is another model that is best for addressing the problem at Starbucks. It bias important for an organization to understand the behaviour of employees other than economic value such as wages (Netting, & O’Connor, 2013 human relations). How workers relate with each other in place of work determines their performance in places of work and known as “Hawthorne Effect” (Dalton, Hoyle, & Watts, 2011 P. 13). The model was found to be operational in both informal and formal organization. A good relation between employees and management allows smooth decision making resulting in quick and better solution. In addition, good interpersonal relation in an organization helps to improve the performance of employees and workers (Reece, 2014 p. 5). This model would have allowed the management to make appropriate decision on the workers pay and prevent misunderstanding thus maintaining the performance of the company.
System model would also be important in addressing misunderstanding problem that led to poor performance of Starbucks coffee company. In this approach the company is able to measure the output in respect to internal operations. The management is able to monitor all the production processes and be able to evaluate the performance of the company on the basis of employees’ productivity (Mbanote, 2011 Models of organizational behaviour). Therefore, the management would have been able to realise that there was a problem before hand and employ various management skills before a problem could erupt. When productivity of employees decline, the management finds the immediate cause and addresses the problem giving an immediate and effective decision (Noble, 2014 p. 15). The problem of employees payment would have been addressed before the company could make losses through low productivity. Consequently, the employees would not have reached to the extent of dissatisfaction and reduced performance. Thereby, the performance of the company would not have been affected.
Contingency model is another important organizational behaviour theory that was useful for Starbucks coffee company. In contingency model, a situation forces adaptation of the best leadership skills (Tushman, & Romanelli, 2008 p. 174). In other words, it is situational leadership skills that leader are capable of developing in order to adjust their leadership and relationship behaviour to address the situation at hand. The model was developed by a management theorist named Fred Fiedler in 1967 (Singh, 2010 p. 275). In Starbucks coffee company, the effectiveness of leaders in the prevailing situation was important in addressing employees’ dissatisfaction in their decision. The contingency models require leaders to adjust with the situation so that the performance of an organization is not affected. However, the management in Starbucks New Zealand Company compromised on the prevailing situation resulting in decreased performance of employees and productivity of the company. The case required an immediate decision that would have maintained the motivation of employees and job satisfaction. An immediate meeting with employees’ union leaders and addressing the issue would have kept the hope of employees a live and they would have continued performing at their level best thus the growth and productivity of the company would have been maintained. Moreover, reverse of the decision and initiation of a new process to make an alternative decision that would involve all the employees’ representatives and other stakeholders would have calmed the situation. This would have prevented employees from changing their behaviour and focus on the goal of the company to improve its productivity. Contingency model of leadership is one of organizational behaviour that has been adapted by many corporations that have found themselves in crisis and needs to save the company (Zaccaro, 2007 P. 6).
Bureaucracy model is one of the management models that is highly used in Starbucks coffee company. The level of management is divided in levels of management and this make it difficult for employees to interact with the top management directly. The high level of bureaucracy serves as an obstacle of employees to air their grievances and thus any decision or problem must be addressed through a hierarchical process making it to take a lot of time (Greenberg, 2013 bureaucratic model-ideal types). In the case that happened to Starbucks would have been solved in good time and minimized the effect that was caused by the situation. However, the decision had to follow a protocol that took a lot of time and some of the decisions were being objected at different levels. Therefore, employees got impatient and they started reiterating through low performance and low productivity that affected greatly the performance of the company. Bureaucratic model of organization management requires solution to situations that are not urgent and that may not affect the productivity and effectiveness of the company (Boin, & Hart, 2007 p. 43). An urgent situation requires quick decision making and action before an organization is affected negatively. Therefore, urgent solution was required in Starbuck and so bureaucratic model was not appropriate.
Organization behaviour is the study how individual and groups of people interact with the internal processes of an organization with respect to effectiveness of a company. Starbucks coffee company experienced a change in behaviour of employees in New Zealand after a misunderstanding on the increment of wages to $ 12 a day. The employees’ change of behaviour affected the effectiveness of the company resulting to poor economic performance. Therefore, it was necessary for the company to apply various organization behaviour models or theories in order to understand and address the change in behaviour so that the effectiveness of the company in providing services and products could be resumed. Some of the models included neo-human relations, which entailed an approach that ensured that management could be able to motivate employees through satisfying their basic needs and giving attractive remunerations that would result in change of behaviour and thus affectivity in the company. In addition, other models that were important in addressing the problem at Starbuck were human relations, contingency leadership model, system model, scientific leadership model, decision making model, and bureaucratic models. The models are important in shaping the management and employees behaviour towards effective performance of the organization. These models of organization behaviour did not come into play before the crisis and immediately after the crisis thus affecting the performance or the organization negatively.
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