Ch.11 Organizational Structure, Systems, and Processes

Chapter 11 describes the different types of implementation levers, including organizational structure, systems and processes, and people and rewards that when combined with strategic leadership transform an intended strategy into a realized one.

To review the role of the strategic leader, recall my entry about Howard Schultz. He is tasked with the responsibility of making lever and resource allocation decisions and creating support among stakeholders. Shultz, for example, returned to the scene in 2008 to help revitalize the company when it hit a financial rough patch and authorized the tough but necessary decision to cut 900 stores. He had to make decisions to reallocate resources from failing stores to profitable ones and to seek out new locations and acquisitions to invest in that would improve the company's strength and financial sustainability.

This chapter specifically focuses on implementation levers such as the organizational structure. The basic structure of the Starbucks Corporation, as described by the Houston Chronicle is as follows:

"Starbucks executives oversee the company from its headquarters in the city of its birth, Seattle, Washington. Around the country, district managers oversee regional groupings of stores. These district managers report directly to the Starbucks Corporation. At each store, a store manager acts as the chief. Under this store manager are a collection of shift supervisors who act as managers on duty when the store manager is out. Below the shift supervisors are the rest of the employees, referred to as baristas." 

This most closely resembles the multidivisional approach, in which divisions are organized around geographic markets and division heads are responsible for their district, as described in our text on pg. 369. 

In regards to People and Awards, Starbucks places high value on its employees, and in 2009, they received for the 11th time, recognition on Fortune's "100 Best Companies to Work For." They are no. 94 on the list this year. Starbucks provides health care, offering a comprehensive benefits package to eligible partners who work at least 20 hours per week, with 64% of eligible partners currently enrolled. The company offers flexible work hours and fair and competitive wages, as well as pay packages that include 401(k) saving plans, an employee stock purchase plan and stock options, and other benefits.

Starbucks refers to all of its employees as "partners." Why? The Starbucks website explains, "We’ve built a solid foundation on the direct and open relationship we share with them and our legacy of providing them with a positive workplace." Even though each employee has a specific title such as "barista" or "store manager," being referred to as a partner connotes a sense of ownership and connection to the company and its vision.