Change Management in Starbucks

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Using the organization that your professor has approved, synthesize the organization’s readiness for change. Evaluate whether or not to implement your new program, policy, practice, or procedure. you may submit a 4–6-page

Instructions

write a 4–6-page paper in which you:

1. Describe the company in terms of industry, size, number of employees, and history.
2. Analyze in detail the current HR practice, policy, process, or procedure that you believe should be changed.
3. Formulate three valid reasons for the proposed change based on current change management theories.
4. Appraise the diagnostic tools that you can use to determine an organization’s readiness for change. Propose two diagnostic tools that you can utilize to determine if the organization is ready for change. Defend why you believe the diagnostic tools selected are the best choice for diagnosing change in the organization.
5. Using one of the diagnostic tools you selected, assess the organization’s readiness for change:

5. Provide results of the diagnostic analysis.
6. Explain the results.
7. Interpret whether or not the organization is ready for change. Substantiate your conclusion by referencing current change management theories.

Change Management in Starbucks

Starbucks is a globally recognized brand that is popular for its unique coffee. It was established in the year 1971 by three friends: Zev Siegl, Gordon Bowker and Jerry Baldwin (Bussing-Burks, 2009). Its mission is “to inspire and nurture the human spirit- one person, one cup and one neighborhood at a time” (Starbucks Coffee Company, 2021). The US-based company operates within the consumer services and restaurants industry (Cheng, 2013). Currently having 349,000 full-time employees, Starbucks deals in the roasting, marketing and retailing of specialty coffee across the world (Yahoo!Finance). Among the specific products offered by the company are coffee as well as tea beverages, iced tea, pastries, lunch items, breakfast sandwiches and a variety of ready-to-drink as well as single-serve beverages. Starbucks operates via three segments: Channel Development, Americas, and International. As of the month of October 2020, Starbucks operated roughly 32,000 stores (Yahoo!Finance).

There is sufficient evidence showing that Starbucks is a good illustration of effective human resource procedures, policies, programs and practices. Nonetheless, a key recommendation made for the company is to consider offering employee sponsorship or financing for higher education as a strategy of enhancing employee development. Funding employee’s education is becoming a common trend in the contemporary workplace. As observed by McDonough and Oldham (2020), today’s professionals have to juggle between family commitments and full-time employment. The burden is so huge that most employees are either financially unable or, due to multiple responsibilities, unable to pursue college degrees. For most employees, the challenge is obtaining funds for higher education. Employers who take the initiative of easing this financial burden usually reap immeasurable gains as employees acquire new skills, becoming invaluable assets to organizations (McDonough & Oldham, 2020).

Although Starbucks offers a variety of training programs to employees of different cadres, it is strongly proposed that the company should adopt the practice of funding higher education for its employees. Specific strategies that Starbucks may use to implement this change are tuition assistance as well as offering reimbursement benefits (McDonough & Oldham, 2020). Although this change can be quite costly to the firm, it is necessary for a number of reasons. To begin with, supporting employees to advance their education is one of the ways companies can deal with the mounting competition in the market. In the words of McDonough and Oldham (2020, para.5), “companies will compete on how well they are able to find, source, develop, advance and retain talent”. This is to say that the skills as well as knowledge that workers acquire when they pursue higher education are an invaluable asset that enables companies to maintain a competitive edge in the market.

A second reason why Starbucks should adopt the proposed change is that the dynamic business environment creates new opportunities and threats that call for appropriate response. The unpredictability of the global market thus poses new risks as well as urgency that call for bold thinking with the aim of upgrading workers’ talent. Regrettably, the current approaches in place for financing education do not meet labor market needs (McDonough & Oldham, 2020). This is where employers must come in and provide financial support to employees who are interested in advancing their education.

The third reason why Starbucks ought to adopt the proposed change is already highlighted: the trend of employers financing employee higher education is becoming increasingly common. In this light, it is only prudent that Starbucks follows suit. The reasons described above are supported by Lewin’s three-step theory, which outlines three processes that characterize a change process (Cummings, Bridgman & Brown, 2016). The first process is unfreezing, which fundamentally reflects the realization that a company needs change, as well as reflecting on how other players in the industry are conducting their business. Equally important, funding employees’ higher education is a good illustration of how to implement change with minimal difficulties, as postulated in Lewin’s model.

It is a well-known fact that resistance to change is typical of human beings. To minimize resistance as Starbucks moves to implement the proposed change, it is important that the organization first conducts a thorough assessment of how ready it is for the change. Several diagnostic tools are available for the company to use in assessing readiness for change. One such tool is the McKinsey 7S model. As the name suggests, this model highlights seven key variables or elements that are crucial to successful change in organizations. The seven elements are an organization’s strategy, shared vision/values, systems, structure, staff, skills, and style (Reinventing a Ministry, n.d). There is also the Burke-Litwin model that focuses on the external as well as internal factors that influence change. Precisely, the Burke-Litwin model is used in assessing the interdependence between an organization and its external environment. The model postulates that the barriers to change management are largely caused by external factors, which tend to “challenge core beliefs and assumptions about the organization and what it should be doing” (Cawsey & Deszca, 2007).

The Nadler and Tushman Organizational Congruence Model is yet another tool that can be used to determine an organization’s readiness for change. Like the Burke-Litwin framework, this model describes an organization in the context of the external environment. It focuses on the fit between an organization’s parts. Specifically, it assess whether or not an organization has the right resources, a conducive culture, adequate and relevant systems and structures to support the change (Cawsey & Deszca, 2007). Based on the above description, McKinsey 7S model and the Nadler and Tushman Organizational Congruence Model would be most appropriate for assessing Starbucks readiness for the proposed change. For the 7S model, the fact that it measures the degree to which the change strategy aligns with the seven critical elements of an organization makes the model highly appropriate. By applying this model, Starbucks will ascertain whether or not it has the right systems and structure to support the proposed change. In the same way, the Nadler and Tushman Organizational Congruence Model is deemed relevant and appropriate for Starbucks because it will provide a reliable picture of whether or not Starbucks has sufficient resources and other inputs that are essential for a seamless transformation process. More precisely, this model indicates whether or not Starbucks can transform its inputs-resources, culture etc. into a workable strategy that will achieve the desired results.

The McKinsey 7S model may be applied to Starbucks as follows: regarding structure, Starbucks exhibits a divisional organizational structure where categorizations are made on the basis of brands and geographic location. Key brands are Starbucks, Tevana, Tazo Tea and L Boulange (Yahoo!Finance). Concerning systems, Starbucks operates various systems to ensure that daily business goes on smoothly. Key systems include employee recruitment, selection, transaction processing, customer relationship management, and knowledge management. The company’s business strategy is founded upon product differentiation, emphasis being placed on product as well as service quality. Additionally, the company has intensively integrated technology into different business processes. When it comes to skills, the fact that Starbucks offers a variety of training programs, besides embracing diversity, is proof that the company invests in ensuring that employees have relevant skills. About style, Starbucks exhibits servant leadership where employees are supported in every area key to their growth. A relationship-driven apptroach to leadership is illustrated in the fact that Starbucks emphasizes friendliness and cordiality among employees. Collaboration together with communication, as well as inclusion alongside diversity, are defining elements of Starbucks’ style (Starbucks Coffe Company, 2021). In reference to the analysis conducted above, it may be concluded that Starbucks is ready for change.

References

Busiing-Burks, M. (2009). Starbucks. Greenwood Press.

Cawsey, T. & Deszca, G. (2007). Toolkit for organizational change. SAGE.

Cheng, P. (2013). Taming the money sharks: 8 super-easy stock investment maxims. Wiley.

Cummings, S., Bridgman, T., & Brown, K. G. (2016). Unfreezing change as three steps: Rethinking Kurt Lewin’s legacy for change management. Human Relations, 69(1), 33-60.

McDonough, T. & Oldham, C. (2020). Why companies should pay for employees to further their education. Harvard Business Review. https://hbr.org/sponsored/2020/10/why-companies-should-pay-for-employees-to-further-their-education

Reinventing a ministry. (n.d.). Institute of Public Administration of Canada.

Starbucks Coffee Company. (2021). Company information. www.starbucks.com/about-us/company-information

Yahoo!Finance. Starbucks Corporation (SBUX). https://finance.yahoo.com/quote/SBUX/profile/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFeGE374wRTQ7WIt-zPtCN3F0WUx8KMFwmxvfMZQjiKGwPbRhn65-qDJ9JAw5SH_1Hc1GJch_vkDho-Gp0Q_lV3y5lwIzsez5pNHwQhocF4Nsq0fe4xLdPEZraXmz7CUnKv2zxbvnJk2Kh2_X8uNxY6xf7nXt7h9GO6xvwTv9vQ_