Starbucks Organizational Structure

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Running head: ORGANIZATIONAL STRUCTURE PAPER- STARBUCKS

Organizational Structure Paper- Starbucks
MGT 230

Organizational Structure Paper- Starbucks

Spending more four dollars for a cup of coffee was unheard of prior the early. Today thanks to visionary owner, Howard Schultz, Starbucks chairman president, and executive officer, it is commonplace. In 1981, Schultz was looking for a cup of the acclaimed “world’s finest fresh-roasted coffees” when he entered his first Starbucks. Impressed by the flavor of the coffee, he would soon create a vision. One year later, while in Italy, he became fascinated and inspired by the Italian coffee bars. He thought that there was certain romanticism that the unique shops offered. So in August 1987, Howard Schultz took a gamble and purchased Starbucks. His vision was born. The goal of Starbucks was to offer the consumer a premium coffee and to create a unique experience for patrons... The Starbuck mission is simple, “To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Starbucks, 2011). They undoubtedly have delivered that mission. Today Starbucks has become the leading specialty coffee retailer in the world. Located in 50 nations, Starbucks have in excess of 15,000stores (Starbucks, 2011).

Howard Schultz, President, Starbucks Corporation

When considering the organizational structure for his new corporation, Schultz had four basic organizational functions he could have chosen. These organizational functions are referred to as: functional, divisional, network, and matrix organizations. A functional organization is structured based on skills required and business functions. The functional organization structure is mainly centered on departments or functions within the organization. In a functional group, a clear chain of command is apparent. Employees which within functional divisions typically have a task to perform and those employees perform those tasks such as a marketing department. In this structure, the marketing department would be staffed with marketing employees. Within the functional organization, it is thought that efficiencies occur within a group of individuals working on a similar product or service. The downside is that this can create individual silo’s that does not promote creativity and varying inputs and opinions. An organization that produces standardized goods and services is well suited to perform in a functional organization because of unique and specialized components of the business. This function also serves well when there are limited products produced and those productions are predictable. Mr. Schultz more than likely also considered the divisional organizational structure. Divisional organizations typically group people based on the products they produce, specific locations and the customers they deal with.  In this structure, an organization uses functional groupings to enable employees to interact and correspond effectively with one another. This process permits clear communication and teamwork which, in turn, leads to good service for its customers. Mr. Schultz; however, successfully created a matrix structure in alignment with Starbucks strategy. Starbuck has no formal organization chart of main departments, functional department consists of...
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