December 10, 2012
Control Mechanisms of Starbucks
Starbucks Coffee Company™ first opened in 1971 in Seattle’s historic pike place market neighborhood (Starbucks Coffee Company, 2012, p1). Their mission is “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Starbucks Coffee Company, 2012, p1). Identifying four control mechanisms, comparing the effectiveness of them, the reaction to the use of these controls, and how they affect the functions of management at a company like Starbucks, it is easy to see why they are so successful.
Identify Four Types of Control Mechanisms
Four types of control mechanisms Starbucks uses are bureaucratic, market, financial, and clan control by empowering role of their culture. Bureaucratic controls instill the use of rules and authority to guide employee’s performance (Bateman & Snell, 2009, p575). Financial controls used are in the way to motivate employees by pay.
Market control “involves the use of economic forces-and the pricing mechanisms that accompany them-to regulate performance” (Bateman & Snell, 2009, p599). Market controls at the corporate level in large companies like Starbucks are used to regulate independent business units (Bateman & Snell, 2009, p600). The control mechanism at the business unit level uses the method of transfer pricing to reflect market forces for internal business transactions (Bateman & Snell, 2009, p600). At the individual level the market control would be how much employees are to be paid (Bateman & Snell, 2009, p600). Clan control mechanism of empowerment is empowering an organization’s employees to meet performance standards (Bateman & Snell, 2009, p602).
Compare & Contrast Control Mechanisms Bureaucratic control mechanisms are about rules, regulations, and authority where clan control mechanisms are about shared goals, values, and trust (Bateman & Snell, 2009, p575). Starbucks
References: Bateman, T. S., & Snell, S. A. (2009). Management: Leading & Collaborating in a Competitive World (8th ed.). Boston, MA: McGraw-Hill Irwin. Starbucks Coffee Company. (2007, Fall). Corporate Social Responsibility/Fiscal 2006 Annual Report. Retrieved from http://assets.starbucks.com/assets/4dd6216d0fd0400f8689eceba0497e04.pdf Starbucks Coffee Company. (2012, Fall). Our Heritage. Retrieved from http://www.starbucks.com/about-us/our-heritage Starbucks Coffee Company. (2012, Fall). Our Starbucks Mission Statement. Retrieved from http://www.starbucks.com/about-us/company-information/mission-statement