While Starbucks’ mission and value statement has recently changed, the previous set of guiding principles directed the company to its vast success. Starbucks’s mission statement and guiding principles were crafted by founder Howard Schulz, President and CEO. The company’s mission was to establish itself as the premier purveyor of the finest coffee in the world while maintaining uncompromising principles as they grow. Starbucks’ six guiding principles helped direct the company to make right decisions. These value statements are (1) provide a motivating work environment and treat each other with respect and dignity; (2) embrace diversity as an essential component in the way they do business; (3) apply the highest standards of excellence to the purchasing, roasting and fresh delivery of coffee; (4) develop enthusiastically satisfied customers all of the time; (5) contribute positively to the communities and environment and (6) recognize that profitability is essential to future success.
Important to note that the last one of Starbucks’ ambitious espoused values is increasing shareholder value; respect, diversity and customer satisfaction come first. The profitability as key to future success and expansions are among the core values, but all the other stakeholders come before the owners: employees, business partners, customers and the broader community. As Mr. Schultz puts it “The foundation has been to achieve the balance between profitability and social conscience. The business model for Starbucks has been this balance between profitability and benevolence." (Leroux, 2008, p.51)
Starbucks won several accolades, it has been recognized as one of Fortune’s of 100 best companies to work for years (Fortune, 2009) and Zagat recently ranked Starbucks as the #1 Best Coffee in the Fast Food and Quick Refreshment categories and as the #1 Most Popular Quick Refreshment Chain (Zagat, 2009). Starbucks received several other prestigious recognitions for years after years such as the “100 Best Corporate Citizens” or being the component of Dow Jones Sustainability World Indexes, which proves that the company’s efforts to live its core values are recognized (Starbucks, 2009). The following two specific examples show the driving forces behind these recognitions as well as some misalignment between the enacted and espoused values.
Starbucks committed to use as much coffee as possible, through its on direct-trade brand "" paying significant premium price, benefiting farmers and their communities in Africa and Central America poorest countries (Leroux, 2008). On the other hand, the company has been criticized for its overuse of disposable paper cups, which are non-recyclable or wasteful water management (Lorraine & Flynn, 2008).
A good example of how the founders’ philosophy impacts the organization culture is the reason behind Starbucks generous health benefits: providing health benefits for almost all the employees is a moral obligation for Mr. Shultz. He grew up in very modest circumstances in a Brooklyn housing project and a traumatic childhood experience about his injured father losing his job without any health benefits explains his personal crusade to provide full health benefit policy and stock option plan to part-time employees too (Serwer & Bonamici, 2004).
Communication and corporate culture
The discussion above on Starbucks’ values proves that a strong organizational culture is a core competitive differentiator. Organizational culture a shared meaning of the members of the organization about what the organization stands for and constitutes values, norms and behavior in which the stakeholders believe (Robbins and Judge, 2007).
“Culture is communication and communication is culture” (Hall, as cited in Schall, 1983, p. 559). The interaction and inseparability of culture and communication was observed by several other studies. Per Berger at al, organizational culture develops through communication and at the same time “communication is a cultural artifact through which organizational actors come to understand their organization” (as cited in, Brown and Starkey, 1994, p. 809).
Communication is like glue that keeps every organization stick together; therefore, communication has a pivotal role to have a stronger organizational culture: proper communication helps spreading the values through war stories, rituals and eventually the members’ perception of the characteristics of an organization’s culture (Robbins and Judge, 2007). Research shows that the right communication of core values and guiding principles keeps the organization culture alive. On the other hand, a strong organizational culture influences the attitudes how the members of an organization communicate.
Numerous “anti Starbucks” blogs and gripe sites frequently target the company with various stories about alleged mistreatment of employees and its fake corporate values (Marques, 2004). Based on the research of articles about the company proved that the company efforts to live up its ambitious principles. As managers pursuit multiple objectives and make efforts to accomplish more with fewer re-sources their actions are seen as non compliance of their espousal. For example, Starbucks decision to ended brewing decaf coffees after noon is falling short of their espoused value of developing enthusiastically satisfied customers all the time (Dentch, 2009). Per Meglino and Ravlin (1998) values state what is more important—they are considered as priorities and customers and employees will view Starbucks sacrificing quality customer service to cost cutting. Discrepancy between managers’ words and deeds will damage the corporate culture and eventually the core of the organization.
Conflict’s role in communication
People often think about in negative terms of conflicts, they are usually conjuring negative images of family feuds, brawls and wars. In fact, conflicts are natural results of different perception of incompatible goals and scarce resources.
The opportunity to voice opinions in the workplace, especially dissenting opinions with the status quo, is the sign of a healthy leadership and trust. Furthermore, organizational learning and ability to address challenges are the result of resolving conflicts. Constructive, substantive conflicts concentrating various ideas and decisions to be made benefit the group and group members by reaching widely accepted decisions, building new friendships and acknowledgement from outside the group. However, unresolved conflicts due to lack of cooperation between group members or avoidance of conflicts, will result in suboptimal solutions and disruption of teamwork, therefore active conflict management is critical (Beebe & Masterson, 2006).
Starbucks’ rapid expansion, mixed record of being socially and environmentally responsible corporate citizen is constant source of discussions within senior management, individual shops, fan and hate sites alike. As a truly global organization, Starbucks is also facing with diverse perception of the values it represents. Opening up a dialogue with interested parties at local and global level, leveraging on the interest it spurs and the vast human resources can result in collision of very different views on the path the company should take in the future to preserve its core values and address practices criticized by many. Listening to constructive criticism from various stakeholders will allows Starbucks to consider various course of options, ensure wider acceptance and find means to retain the small company feeling even as it gets bigger.
Conclusions and Recommendations
Friends and foes alike blame the target-oriented corporate culture responsibility for Starbucks’ recent troubles derived from over-extension. Starbucks has mixed record on environmentalism and social responsibility showing that the unprecedented expansion came at a price. During the recent challenging times, when organizations fundamental principles are often tested, management and employees look to the organization’s core values for guidance when making decisions, therefore, imperative that the core values are matching the challenges Starbucks faces and from senior management down to baristas, everyone follows them.
References
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Leroux, M. (2008, December 1). Starbucks slows down to taste the coffee as fairtrade becomes focus. The Times,51. Retrieved August 17, 2009, from ProQuest Newsstand. (Document ID: 1604178851).
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Schall, M.S. (1983). A Communication-Rules Approach to Organizational Culture. Administrative Science Quarterly, Vol. 28, No. 4 (Dec., 1983), pp. 557-581. Retrieved August 18, 2009, from Business Source Complete database.
Serwer, A., & Bonamici, K. (2004, January 26). HOT STARBUCKS TO GO. Fortune, 149(2), 60-74. Retrieved August 21, 2009, from Academic Search Alumni Edition database.
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