Starbucks Case

As a result, Catar maps consistently appears on Best Places to Work lists, and Schultz continues to be recognized for attractorship by g overnings such as the Deciphers Institute, Fortune, and Glissando (Cataracts and Howard, 2014). Schultz in any casing appears on Fortunes first list Of the Androids 50 Greatest Leaders as egress 29 (Cataracts News). Although critics whitethorn believe that Schultz success is a result of untainted luck and situational factors, some(prenominal) trineers theories explain why Schultz and Cataracts continue to be successful.The more or less important of these theories include trait theory and transformational leading theory, which Schultz illustrates with umteen of his leaders traits, skills, and beliefs. Situational factors contributed to the initial success of Cataracts, but Schultz leaders abilities, ethics, and passion ar what make Cataracts a driving force in the nutrition and deglutition industry today. Schultz exemplifies dynam ic leading skills by his ability to push Cataracts earlier without losing integrity.Although Schultz led Cataracts to be the successful ph wizr that it is today, he stepped passel from his posture in 2000. However, the phoner work throughd several problems in 2008 be piss of an unst qualified parsimony and a series of poor management decisions. Schultz then felt compelled to outcome to the companionship. When Schultz returned, he found that things were worse than hed thought (Igniting, 2010). The Cataracts leading team admitted to attend tolessness the companionships employees and heir families, and Schultz had to make several difficult decisions to restore the company.In amplification to the crises in management, the monetary crisis of the economy added stress on the Cataracts leadership team. Customers began to rethink expenditure four dollars on a latte, and eventually competition set in as new(prenominal) backupes saw Cataracts turning a profit from marketing cocoa. The overwhelming amount of problems challenged Schultz goal of preserving and improving the integrity of the company and its determine, culture, directive principles, and the reservoir of trust with Cataracts mess Igniting, 2010).Howard Schultz got Cataracts back on track by using his actual k without delayledge of the company, an asset other(a) Coos did non have. He tried to do the right thing by shutting down the stores for three and a half hours for retraining. He said, We be retraining our people because we have forgotten what we stand for, and that is the pursuit of an unequivocal, absolute commitment to eccentric (Igniting, 2010). Schultz motivation and thirst for success al started Cataracts to regain its strength.In the age 2006 to 201 3, the company underwent several leadership arrangements because Schultz carefully chose certain people for leadership positions that would optimize the increment of the company. In 2011, Cataracts adopted a parvenue corpora te structure to zip its growth strategy. Schultz said, Our company performance over the sometime(prenominal) two years has positioned Cataracts for significant international opportunities ahead (Cataracts Announces New Leadership, 2011 He decided to track down a multi-brand, multinational strategy that would optimize the companys speed and concentre discharge in advance.Schultz utilize a three-region organization Structure including China and Asia Pacific, the Americas, and MEME (Europe, LLC. K. Middle East, Russia, and Africa). He selected John Culver, Cliff Burrows, and Michelle Gas to serve as president of apiece region, and the presidents responsibilities included licking with licensed and joint-venture business unwrapners and reporting to Schultz. Cataracts also created a multi-brand, multi-channel future by building a portfolio of branded business get together beyond the Cataracts retail brand (Cataracts Announces New Leadership, 201 1).Cattles Best Coffee and wetb ack Tea both continued to be important growth opportunities as they generated revenue for the company. Building on the new corporate structure and company success, Schultz decided to strengthen the Cataracts precedential Leadership team in 2014 because he wanted to position the company to leverage its assets and operations, and gain maximum public assistance from the retail, consumer, mobile, and digital shifts currently underway in the global marketplace (Cataracts Strengthens Senior Leadership team, 2014).Schultz said, These organizational moves map our internal talent to the quickly evolving retail environment and significant strategic and market opportunities ahead of us. With the new leadership structure, Schultz wanted to bring greater financial and operational redress and to focus on the Cataracts mission and its growth (Cataracts Strengthens Senior Leadership group, 2014). Senior leadership falsifys include Troy Lasted to Chief Operating Officer, Scott muddle to Execu tive guilt President and Chief Financial Officer, and Craig Russell to Executive Vice President.With these changes, Schultz intended to focus on generation retailing and payments initiatives in the areas of digital, mobile, card, loyalty, and e-commerce and to relieve oneself for its next wave of global growth Cataracts Strengthens Senior Leadership Team, 2014). The senior leadership changes took effect on February 3, 2014, and Cataracts continues to thrive under the leadership of Howard Schultz. Although Schultz is however(prenominal) one of legion(predicate) another(prenominal) leaders who has appeared throughout history, he continues to help redefine what leadership is and how to use ones leadership skills to run a successful company.In general, leadership is defined as the process of providing general direction and influencing individuals or groups to achieve goals, but leaders convey leadership in many unlike ways (Collar, 201 1). One theory that explains why Schultz is a n exceptional leader is the trait theory of leadership. Atone time, it was thought that some people were born(p) with certain traits that made them effective leaders, whereas others were born without leadership traits (Collar, 201 1).However, research has shown that leaders can learn or develop many of the traits or characteristics that they posses. Still, researchers retain that most successful leaders tend to share common leadership traits, regardless if they learn or inherit them. Some of these important leadership traits include drive, motivation, integrity, self- inference, cognitive ability, knowledge of domain, openness to new experiences, and extroversion, all of which Howard Schultz and other successful leaders exhibit. For example, Schultz displayed both drive and motivation when starting his company.Despite financial stress and emotional struggles with his causes death, Schultz channeled his drive to build a company where his father would be proud to work (George, 2007 ). Schultz used his past struggles to drive him forward and motivate him to create a working environment that his employees loved and were conform to with. Rather than displaying a personalized reason motive, Schultz displayed a socialized power motive to achieve goals that were in the best interest of the organization and its followers.Schultz also exhibits integrity, since he is honest and maintains consistency between what he says and what he does. As a result, his employees trust him and are happy to work for a company that is ethically sound and fair. The Deciphers Institute named Cataracts as one of the Worlds Most honorable Companies for the eighth year in a row because of its honest and authorized leaders and employees (Cataracts and Howard, 2014). Furtherto a greater extent, Schultz also uses his cognitive ability and knowledge of gourmet umber and customer military service of process to positively influence and teach his employees and partners.Schultz even travelled to Italy to gain insight on the unique community experience that many Italian espresso bars play in customers lives so that he could afford many of these concepts that he learned in Italy to his own drinking chocolate shops. As a result, Schultz has used traits like his knowledge, drive, motivation, and integrity to make Cataracts into the successful organization that he had endlessly dreamed of as a young tyke (George, 2007). In addition to trait theory, Schultz leadership skills also support the transformational leadership theory.Transformational leadership theory involves motivating followers to do more(prenominal) than expected, to always develop and grow, to increase their level of self-confidence, and to place the interest of the organization before their own. As a result, transformational leaders, like Schultz, are charismatic as nearly as intellectually stimulating and show individual consideration of followers. Schultz is the complete(a) example of a transformation al leader because he created a company found on his vision f transcendlence and innovation for the modern chocolate shop.His goal was to create a third place for customers in addition to their home and office by stress on customer service and satisfaction. Therefore, he focused on empowering and in quiet downing pride even in bottom line employees, so that they could be happy at work and create the positive environment that Schultz wanted Cataracts to have. In rule to motivate employees, Schultz instituted a training program designed to groom knowledgeable employees who would bonk working behind a counter, since he believed that friendly, efficient employees would boost gross sales (Howard Schultz, 2008).By providing exalted smell products for customers that employees were knowledgeable about, Schultz was able to give employees a argumentation that they could feel proud of and happy to be at. According to John R. Scarsdale, Schultz believes the only competitive advantage C ataracts has as a national retail company is its workforce (Scarsdale, 2013). Therefore, Schultz values his employees performance and happiness over e verything else that Cataracts offers. As a result, Schultz leadership style is based on his compassion for, and commitment to, customers and mental faculty alike (Howard Schultz, n. D. ).Schultz knows that the key to any companys success captures with its workforce, because the employees interact with the customer day-to-day and deliver the actual product. Schultz notes, mU cant expect your employees to trespass the expectations of your customers if you dont exceed the employees expectations of management. Thats the contract (More Excellent Customer Service Quotes, n. D. ). Although Schultz leadership traits and transformational leadership style are both all important(p) reasons for Cataracts huge success over the past 40 years, some situational factors are also responsible for part of Cataracts success.Some Of these situational factors include senior higher(prenominal) demand for quality, increase in fast food businesses, and convenient store locations. Today more and more individuals are focusing on the quality of the food and drinkables that they put into their bodies, which has resulted in a higher demand for quality. Rather than just simply buying the cheapest product, consumers want a product that offers the most value for a reasonable price. For example, today more consumers prefer a cup of coffee that is fresh and made to order rather than a cup of coffee that is pre-made from synthetic ingredients.Therefore, any customers are willing to pay a dollar or two more for a higher quality coffee product rather than a lower quality coffee product. However, customers still expect the price for high quality coffee to be fairly reasonable, since the focus on quality in food products is becoming so important. Therefore, consumers now expect high quality products at a lower price. As a result, Cataracts has been able to capitalize on this new demand for high quality products at a reasonable price with its wide array of quality coffee and beverages.In addition to demand for quality, fast food businesses seem to be regress by no matter where one goes because the demand for food and beverages to go has skyrocketed over the past few decades. Many individuals these days are always on the move and looking for a food or coffee establishment that can satisfy their needs in a goldbrick and efficient amount of time. Although it seems as though fast food and beverage options are never out of reach these days, this was not always the cutting for many coffee shops.For example, Schultz encountered the original Cataracts Coffee in the 1 oral cavity during a sales call in Seattle, when the company only change roasted whole bean coffees and did not brew coffee to sell. However, now Cataracts offers a huge variety of beverages, snacks, and much more that take only under a few minutes to make for cu stomers. Additionally, Cataracts convenient locations are another situational factor that helped add to its fast success, since the locations are typically very accessible and easy to find. In addition, the demand for drive thru windows has also habituated Cataracts a boost for customers in a hurry.Rather than having to physically go into a Cataracts store to order coffee, customers can order from their car if they are in a hurry. As a result, Cataracts has benefited tremendously from its convenient actions and fast service. Situational factors, such as demand for quality, increase in fast food chains, convenient locations, and many others, are all extremely important contributions to Cataracts huge success. However, Howard Schultz leadership traits and skills that he instilled within his employees were also critical to keep Cataracts the number one coffee chain in the world.For example, Cataracts could be a completely different type of coffee company without Schultz guidance, and both his employees and Cataracts customers would not be as happy without his focus on employee satisfaction and quality service. Although Cataracts would likely still be somewhat successful without Schultz leadership, the company would likely have hassle differentiating itself from other coffee chains. Furthermore, the company also would not have as many loyal customers without their focus on quality customer service, since the employees would not be required to go through intense training.In addition, employees would not be as happy, since many of the employee benefits such as health care may not exist without Schultz. Consequently, unhappy employees could turn away potential and existing customers and only allow Cataracts to have short-term success. As a result, without Schultz focus on employee and customer satisfaction, the situational factors would not have mattered in the persistent run. Therefore, Schultz leadership skills were essential in establishing Cataracts as a domin ant force in the coffee industry.Although Schultz allegiance clearly lies with Cataracts, he could apply many of his leadership skills and abilities to another organization if needed. For example, if Howard Schultz was the CEO of Wall-Mart, he could use his knowledge and experience from Cataracts to lead Wall-Mart in a more positive direction by improving the quality of employees jobs. Currently, several issues exist that may hold the company back from reaching its full potential. Hidden beneath operational problems, lessened sales, and low customer service ratings, employees are complaining about low salaries, erratic scheduling, and understanding (Heal, 2008).Currently, as many as 825,000 of Wall-Mart workers have an one-year income of less than $25,000 (Five Ways 2014). Wall-Mart is one of the most successful companies in the country and can certainly afford to raise these salaries so that unverbalised working employees are able to support a family. Also, Wall-Mart employs a large annuity of employees in odd-job(prenominal) positions, allowing the company to skimp on costs, when most of these employees hope more hours (Five Ways, 2014). Workers are becoming frustrated with executives avoiding this crucial issue.Protests occurred at roughly 1,500 Wall-Mart stores on this past Black Friday alone. The protesters, a shuffle of workers and supporters, held signs calling for higher pay and better working conditions. To make matters worse, large cuts of worker hours are taking a toll on consumer ratings of the company. A recent Consumer Reports Survey placed Wall-Mart at the bottom of the list of grocers. Shoppers mentioned the understanding, a clear cause of, long lines and an overall poor customer service (Walter Ranks, 2014).According to Geoffrey Heal (2008), accusations against Wall-Mart include gender discrimination, low wages, excessive use of part-time labor, and harsh working conditions. Based off these accusations, if Schultz were the CEO of Wall -Mart, its position would be much different. Many of these weak areas are exactly where Cataracts has excelled over the past few decades. Schultz recon sized an approach that would build success for a attach to with such a large number of employees. First, Cataracts pays its employees wages far to a higher place the service branch average and offers low-cost health benefit opportunities.Cataracts know early on that properly training employees and acting generously towards them would lead to a very low employee turnover rate, which would reward the company in the future (Heal, 2008). Perhaps Wall-Marts biggest challenge is that, unlike Cataracts, many of the employees are not proud to work there. Schultz prides Cataracts on being an employer that people trust. Workers share old(prenominal) hope for the companys future, and they want to be a part of it. Wall-Mart, on the other hand, is facing new lawsuits continuously -? and its own employees file a chew of them.Within the past y ear, the National Labor Relations Board filed a illness against Wall-Mart for illegally firing and punishing about 60 workers who vocalizes a desire for change (Five Ways, 2014). In comparison, Howard Schultz has always treated his employees with respect and wanted their individual opinions. Cataracts often holds open forums and encourages employees to speak their minds, even it they have disallow comments. The combination of these criticisms along with praise in table areas has been important in contributing to shape the future of Cataracts and its culture.Schultz realized the value of personal confederacy when building Cataracts, and this is the major area that Wall-Mart needs improvement in. According to the case body of work, Schultz notes that remaining a humble and grounded entrepreneur is crucial. Schultz would bring this attitude to the executives at Wall-Mart, who currently do not cherish their employees as assets of the company. The case study reinforces Cataracts as a company that listens to and understands each employee by noting the many has implemented generous employee benefits, training programs, and employee stock ownership programs. For this reason, the transformation of Cataracts serves as a great model for the hypothetical situation of Schultz as CEO of Wall-Mart. Schultz would excel as the CEO of Wall-Mart, providing a fresh perspective to the executives and managers, and instilling values from the immense growth at Cataracts during his time there. No longer would boss more or less workers be acceptable, and changing this culture of intimidation would go a long way to improving labor relations (Five Ways, 2014). The basic change off higher minimum wage would reduce the number of protests and cause employees to feel a more prideful connection to the company.With Schultz as CEO, Wall-Mart executives would begin to recognize the importance of listening to employees across all levels and this simple act would go a long way to make the c ompany a stronger unit. Despite Howard Schultz eight-year hiatus in 2000, he has been one of Cataracts greatest assets by building its fundamental ideals and values and staying involved to communicate his vision. For these reasons, Schultz is known around the world as one of the greatest leaders in the business world cause of his ethical values, passion, and communication skills.