Starbucks Case

As a result, Catar wreaks consistently appears on Best Places to create lists, and Schultz continues to be recognized for involve by cheeks such(prenominal) as the Deciphers Institute, Fortune, and Glissando (Cataracts and Howard, 2014). Schultz high-spiritedly appears on Fortunes first list Of the Androids 50 Greatest Leaders as chip 29 (Cataracts mods). Although critics may believe that Schultz supremacy is a result of mere band and steadal factors, some(prenominal) leaders theories explain wherefore Schultz and Cataracts continue to be winnerful.The virtually serious of these theories sop up on trait conjecture and transformational lead guess, which Schultz illustrates with more of his leaders traits, skills, and beliefs. Situational factors contributed to the initial winner of Cataracts, but Schultz leaders abilities, ethics, and passion argon what answer Cataracts a driving wad in the solid feed and beverage labor today. Schultz exemplifies dynamic le adership skills by his mightiness to push Cataracts forward without losing integrity.Although Schultz led Cataracts to be the happy fraternity that it is today, he stepped come out from his ready in 2000. However, the play a bulky experience several problems in 2008 beca affair of an uns give in parsimony and a series of poor watchfulness decisions. Schultz then felt compelled to re plication to the caller-out. When Schultz returned, he found that things were worse than hed thought (Igniting, 2010). The Cataracts leadership aggroup admitted to failing the orders employees and heir families, and Schultz had to make several difficult decisions to re storehouse the company.In summing up to the crises in management, the financial crisis of the economy added tensity on the Cataracts leadership team. Customers began to rethink outgo four horses on a latte, and at last competition set in as other(a) melodyes saw Cataracts turning a profit from selling drinking chocolat e. The everyplacewhelming summate of problems challenged Schultz goal of preserving and improving the integrity of the company and its determine, destination, guiding principles, and the reservoir of trust with Cataracts mass Igniting, 2010).Howard Schultz got Cataracts back on track by using his existing noesis of the company, an addition other Coos did non find. He well-tried to do the right thing by shutting d take in the stores for three and a half hours for educate. He said, We be retraining our passel because we have forgotten what we viewpoint for, and that is the pursuit of an unequivocal, absolute commitment to spirit (Igniting, 2010). Schultz motivation and thirst for success al confuseded Cataracts to detect its strength.In the days 2006 to 201 3, the company underwent several leadership arrangements because Schultz c atomic number 18fully chose certain people for leadership gravels that would optimize the grun-inth of the company. In 2011, Cataracts sel ect a modernistic corporate mental synthesis to accelerate its dispatchshoot strategy. Schultz said, Our company proceeding over the prehistoric two years has positi singled Cataracts for signifi peckt inter depicted object opportunities ahead (Cataracts Announces New Leadership, 2011 He mulish to execute a multi-brand, multinational strategy that would optimize the companys zip and concentrate on going forward.Schultz implemented a three-region organization Structure including China and Asia Pacific, the Americas, and MEME (Europe, LLC. K. middle(a) East, Russia, and Africa). He selected John Culver, Cliff Burrows, and Michelle liquid to serve as president of separately region, and the presidents responsibilities included runing with licensed and joint-venture telephone circuit partners and reporting to Schultz. Cataracts as well created a multi-brand, multi-channel coming(prenominal) by systema skeletaleing a portfolio of brand business united beyond the Cataracts sell brand (Cataracts Announces New Leadership, 201 1).Cattles Best cocoa and Taco Tea two keep to be of the essence(predicate) growth opportunities as they generated r change surfaceue for the company. Building on the new corporate structure and company success, Schultz decided to strengthen the Cataracts ripened Leadership team in 2014 because he precious to position the company to leverage its assets and operations, and gain maximum wellbeing from the retail, consumer, mobile, and digital shifts presently afoot(predicate) in the spheric tradeplace (Cataracts Strengthens Senior Leadership police squad, 2014).Schultz said, These organizational moves mapping our internal talent to the rapidly evolving retail environment and significant strategic and market opportunities ahead of us. With the new leadership structure, Schultz wanted to bring greater financial and operating(a) discipline and to tension on the Cataracts boot and its growth (Cataracts Strengthens Seni or Leadership team, 2014). Senior leadership changes include troy weight Lasted to Chief Operating Officer, Scott Maw to executive Vice President and Chief pecuniary Officer, and Craig Russell to Executive Vice President.With these changes, Schultz intended to focus on generation retailing and payments initiatives in the argonas of digital, mobile, card, loyalty, and e-commerce and to prepargon 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 precisely(prenominal) unmatchable of more a(prenominal) leaders who has appeargond end-to-end history, he continues to help redefine what leadership is and how to use one and only(a)s leadership skills to run a successful company.In general, leadership is defined as the process of providing general anxiety and influencing contingency-by-cas es or groups to achieve goals, but leaders commence leadership in many antithetical miens (Collar, 201 1). One theory that explains why Schultz is an exceptional leader is the trait theory of leadership. Atone time, it was thought that some people were born with certain traits that make them in effect(p) leaders, whereas others were born without leadership traits (Collar, 201 1).However, research has shown that leaders can gain or reveal many of the traits or characteristics that they posses. Still, researchers agree that most successful leaders tend to dispense common leadership traits, regardless if they learn or inherit them. Some of these important leadership traits include motion, 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 amaze and motivation when starting his company. contempt financi al try out and emotional struggles with his fathers death, Schultz channeled his contain to build a company where his father would be rarified to start (George, 2007). Schultz used his onetime(prenominal) struggles to drive him forward and motivate him to create a on the job(p) environment that his employees loved and were cheerful with. Rather than displaying a in the flesh(predicate)ized mightiness pauperization, Schultz displayed a socialized power motive to achieve goals that were in the best saki of the organization and its followers.Schultz too exhibits integrity, since he is beneficial and maintains consistency between what he says and what he does. As a result, his employees trust him and be happy to work for a company that is ethically sound and fair. The Deciphers Institute named Cataracts as one of the Worlds Most Ethical Companies for the eighth year in a row because of its honest and trustworthy leaders and employees (Cataracts and Howard, 2014). Further more than, Schultz likewise uses his cognitive ability and knowledge of gourmet burnt umber and client service to positively influence and teach his employees and partners.Schultz even traveled to Italy to gain insight on the unique community experience that many Italian espresso bars play in customers lives so that he could apply many of these concepts that he learned in Italy to his own coffee shops. As a result, Schultz has used traits handle his knowledge, drive, motivation, and integrity to make Cataracts into the successful organization that he had of all time dreamed of as a young child (George, 2007). In addition to trait theory, Schultz leadership skills as well as support the transformational leadership theory.Transformational leadership theory involves motivating followers to do more than foreknowed, to continuously develop and grow, to increase their aim of self-confidence, and to place the interest of the organization onward their own. As a result, transformat ional leaders, like Schultz, atomic number 18 charismatic as well as intellectually stimulating and show individual consideration of followers. Schultz is the perfect example of a transformational leader because he created a company establish on his vision f excellence and innovation for the modern coffee shop.His goal was to create a ternary place for customers in addition to their home base and office by focusing on customer service and satisfaction. Therefore, he focus on empowering and instilling 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 order to motivate employees, Schultz instituted a training program designed to discipline knowing employees who would enjoy working(a)s toilet a counter, since he believed that friendly, high-octane employees would bring up sales (Howard Schultz, 2008).By providing high timbre convergences for customers that employees were k nowledgeable about, Schultz was able to give employees a job that they could feel proud of and happy to be at. According to John R. Scarsdale, Schultz believes the only agonistic advantage Cataracts has as a national retail company is its workforce (Scarsdale, 2013). Therefore, Schultz values his employees performance and happiness over everything else that Cataracts offers. As a result, Schultz leadership style is based on his compassion for, and commitment to, customers and cater alike (Howard Schultz, n. D. ).Schultz knows that the key to any companys success begins with its workforce, because the employees interact with the customer everyday and sp atomic number 18 the actual mathematical product. Schultz nones, mU cant expect your employees to exceed the expectations of your customers if you dont exceed the employees expectations of management. Thats the contract ( more(prenominal) Excellent Customer Service Quotes, n. D. ). Although Schultz leadership traits and transfor mational leadership style are both pivotal reasons for Cataracts large success over the away 40 years, some situational factors are also responsible for part of Cataracts success.Some Of these situational factors include high supplicate for tonus, increase in strong food businesses, and convenient store locations. Today more and more individuals are focusing on the prize of the food and beverages that they put into their bodies, which has resulted in a higher demand for spirit. Rather than just obviously buying the cheapest product, consumers want a product that offers the most value for a level-headed worth. For example, today more consumers prefer a cupful 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 musical note coffee product rather than a lower quality coffee product. However, customers still expect the wrong 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, extravagant food businesses seem to be lose by no matter where one goes because the demand for food and beverages to go has skyrocketed over the gone a couple of(prenominal) decades. Many individuals these days are always on the move and flavour for a food or coffee establishment that can satisfy their take in a short and efficient amount of time. Although it seems as though libertine food and beverage options are never out of reach these days, this was not always the case for many coffee shops.For example, Schultz encountered the veritable Cataracts Coffee in the 1 reply during a sales call in Seattle, when the company only sold roasted whole bean coffees and did not brew coffee to sell. However, now Cataracts offers a considerable variety of beverages, snacks, and much more that take only under a few minutes to make for customers. Additionally, Cataracts convenient locations are other situational factor that helped add to its fast success, since the locations are typically very brotherly and easy to find. In addition, the demand for drive thru windows has also given Cataracts a come a dour 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 staggeringly 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 a nd 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 fount 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 in all probability still be somewhat successful without Schultz leadership, the company would likely have rag 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 long run. Therefore, Schultz leadership skills were essential in establishing Cataracts as a dominant 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. privy beneath operational problems, diminished sales, and low customer service ratings, employees are quetch about low salaries, erratic scheduling, and taste ( furbish up, 2008).Currently, as many as 825,000 of Wall-Mart workers have an annual income of less than $2 5,000 ( quintette ship canal 2014). Wall-Mart is one of the most successful companies in the country and can certainly reach to raise these salaries so that hard working employees are able to support a family. Also, Wall-Mart employs a large annuity of employees in part-time positions, allowing the company to skimp on costs, when most of these employees desire 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 mix of workers and supporters, held signs employment for higher pay and better working conditions. To make matters worse, massive cuts of worker hours are taking a toll on consumer ratings of the company. A recent Consumer Reports Survey rigid Wall-Mart at the bottom of the list of grocers. Shoppers mentioned the understanding, a clear cause of, long lines and an boilersuit poor customer service (Walter Ranks, 2014).Ac cording to Geoffrey Heal (2008), accusations against Wall-Mart include gender discrimination, low recompense, 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 worn playing areas are exactly where Cataracts has excelled over the past few decades. Schultz recon sized an approach that would build success for a Company with such a large number of employees. First, Cataracts pays its employees wages far above the service split up average and offers low-cost health benefit opportunities.Cataracts realized early on that mighty training employees and acting generously towards them would lead to a very low employee upset rate, which would reward the company in the future tense (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 tha t people trust. Workers luck genuine 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 lot of them.Within the past year, the National Labor Relations jump on filed a complaint against Wall-Mart for illegally flak 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 cherished their individual opinions. Cataracts often holds open forums and encourages employees to declaim their minds, even it they have negative comments. The conspiracy of these criticisms along with praise in table areas has been important in contributing to hammer the future of Cataracts and its culture.Schultz realized the value of personal connection when building Cataracts, and this is the major area that Wall-Mart needs improvement in. According to the case study, Schultz notes that rema ining a humble and grounded enterpriser 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 expect 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 lieu to the executives and managers, and instilling values from the immense growth at Cataracts during his time there. No long-lived would bullying workers be acceptable, and changing this culture of intimidation would go a long way to improving labor dealings (Five Ways, 2014). The basic change off higher minimum wage would stretch 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 hearing to employees across all levels and this simple act would go a long way to make the company a stronger unit. Despite Howard Schultz eight-year hiatus in 2000, he has been one of Cataracts greatest assets by building its positive ideals and values and staying involved to communicate his vision. For these reasons, Schultz is cognize around the world as one of the greatest leaders in the business world cause of his ethical values, passion, and chat skills.