CASE STUDY INCIDENT

You are probably use to seeing starbucks coffee shops everywhere that you might not realize that the
company went from 11 stores in 1987 to 2,600 in the year of 2000. This incredibly rapid growth sprang form the company's ability to create a unique experience for customers who wanted to buy this dietint brand of lattes and mochas where ever they found themselves. At Starbucks' core, there was a culture of treating each customer as a valued guest who should feel comfortable relaxing and taking in the ambience . Whether you were in the company's founding location in Seattle, Washington, or at the other end of the country in Miami, Flordia, you knew what to espect when you went to a Starbucks. This uniform culture was truly put to the test in the face of massive expansion, however, and by 2006 Starbucks chairman and former CEO Howard Schultz knew something had gone wrong. He noted that "As I visit hundreds of Starbucks store in the cities around the world, the enterpreneurial merchant in me sensed that something intrinsic to Starbucks' brand was missing. An aura. A sprit. The stores were lacking a certain soul." Starbucks' performance has become lackluster, with hundreds of planned store opening being cnacled and hundreds more store being closed.

So, Schultz too the dramatic step of coming back as CEO and engaging ina companywide effort to change the corporate culture back to what it had been before its expansion. All 7,000 Starbucks store were closed for a single afternoon as part of training effort of 135,000 baristas. Quality control was a primany mission; baristas were instructed to pour every glass of espresso like honey from a spoon, to preserve the flavor. This emphasis on quality over speed ran counter to the principles of mass production, but it was just what the company needed to ensure ot could retain its culture. Espresso machines that obscured the customers' view were replaced with lower profile machines that allowed baristas to look directly at the guest while making beverages. And " assembly-line production," like making several drinks at once, was discouraged in favor of slowly making each drink for each customer.

Schultz is convinced his efforts to take culture back to its roots as a neighborhood coffee shop-one embraced with the :romabce of coffee" and treating every customer as an old friend- has saved the company. Today, Starbucks earns more than $3.6 billion in quarterly revenue and operates more than 18,000 store in 60 countires around the globe.

Prompt: Respond to the following questions based on the case study "Incident One: Starbucks Returns to Its Roots," in Chapter 18 of Organizational Behavior.

a. Apply what occurred within Starbucks to identify key items and steps within the process.

b. What role did the leader play in this process?

c. What actions were necessary by the CEO in order to make this a success?

d. What impacts did the organizational structure or design have on the items identified by the CEO? How did the previous task centric, mass production organizational model need to shift to succeed in order to acquire the new people-centric, customer focused organizational model?

e. Evaluate the challenges in your response to (d) above specific to this case study of transformation.

f. Examine the opportunities in your response to (d) above specific to this case study of transformation.

g. How were the culture and performance impacted by the leader's actions? Be specific in stating the actions.

h. Was the leader negligent in any action you feel would have been beneficial to the process?