Case Study - Starbucks
1. Starbuck core agenda is to provide an excellent work environment and for employees to treat each other with respect and signity. How were they ale to make this happen?
2. Describe the "Latte Method". How did it help grow Starbucks?
3. Employees say that they love Starbucks' company culture, and Starbucks regulary tops Fortune's 100 Best Companies to work for. How does Starbuck's promote organizational commitment and job satisfaction?
Case Study 3.1: The Starbucks Experience
According to CNN Money, barista carries the dubious dual distinction of being one of the nation’s most stressful jobs and among those with the lowest pay. Baristas face many challenges: not only do they have to deal with the physical demands of making and serving coffee, they also have the emotional stress of coping with early morning lines of impatient customers in a hurry. In a recent poll surveying coffee workers, 55 percent of respondents reported upper-body repetitive stress injuries, 37 percent complained of persistent sore muscles, 29 percent said they suffered from anxiety attacks, and 44 percent lamented high stress levels. Considering that the median pay of baristas is $20,300, is the stress really worth it? How might their employers help baristas cope? Howard Shultz is CEO of Starbucks Coffee, which is worth about $72.4 billion at the time of this writing and is projected to grow. There are more than 21,000 stores in 65 countries with 91,000+ employees, the bulk of whom are serving up your morning joe. After slashing jobs and closing stores in 2009, Shultz and Starbuck are brewing up new business again. The company’s China/Asia Pacific business grew revenue at 85 percent year over year as reported at close of 2014. When Starbucks was conceived by three friends on the Seattle waterfront in 1971, the number one principle of its mission statement was bold: “To provide a great work environment and treat each other with respect and dignity, “Forty-plus years later, Starbucks continues to provide an exception to CNN Money’s suggestion that the barista job is generally awful. The company frequently tops Fortune’s “100 Best Companies to Work For” list and has legions of fierce brand loyalists, many of them employees past and present.
Managers know that happy, healthy employees make for a better workforce, and a better workforce means a better experience for customers. To keep the money rolling in while remaining true to its founding principles, Starbucks enlisted the help of La Marzocco, the Italian maker of expresso machines. La Mazocco in reach out to an osteopath and a physical therapist for insight into the company’s concerns about the repetitive actions performed by the baristas. They found that lifting milk jugs and steaming milk, tamping, inserting and removing portafilters, and simply standing for long periods had serious health implications. The demands also place a dampener on staff happiness and effectiveness.” To comeback the effect, Starbucks worked with La Marzocco to develop a number of new employee friendly technologies, including the auto dosing and tamping Swift grinder. In the Latte Method, they undergo rigorous training on how to recognize and respond to customer’s needs. When a customer is unhappy, the latte Method suggest, “We Listen to the customer, Acknowledge their complaint, Take action by solving the problem, Thank them, and then Explain why the problem occurred”