Starbucks Case Analysis

I've chosen the Starbucks Corporation on which to do my case assignment for the session. I first became interested in Starbucks while working on a paper for a previous marketing class. I became intrigued at the entrepreneurial spirit that such a large corporation had managed to maintain throughout its massive expansion. Starbucks corporation, unlike many of its now-defunct rivals, has done an outstanding job since its meager beginnings in 1970 with the execution of its strategic process; resulting in it currently owning 40% of the specialty coffee market and boosting annual sales exceeding $7 billion according to Burt Helm. Historic successes and recent turmoil within the company, including a near 40% decline in 2007 in profits (Sullivan 1), has once again piqued my interest in this American company.

For this first assignment, our tasks start with identifying the need for diagnosis, moving on to evaluating several organizational models that are used and have been developed for just such analysis, and finally determining if these models would be effective if used by Starbucks to determine its way ahead.

The importance of Diagnosis

In conducting research I found an interesting quote that I believe sums up the importance of the essential task analysis. "Knowing yourself is one of the most challenging and important tasks of your life. If you know who you are and what you want, you will have a better chance of figuring out how to achieve your own success, happiness and personal fulfillment" (Berkeley.edu, 1). One can easily substitute all personal references with a business perspective and ascertain the importance of analysis. If a business does not know who it is, it will not know what changes it needs to make in order to get where they want to go. Falletta defines analysis as, "assessing an organizations current level of functioning in order to design appropriate change interventions" (Faletta 3). Essentially what Falletta is saying is that by determining what or where an organization is at, as far as infrastructure, procedures, leadership, etc. its leadership can determine what changes need to be made to achieve the desired objectives. Another important benefit of conducting analysis is that "Diagnosis confirms that a problem actually exists" (Faletta 3). In conducting such an analysis, a business can search out the underlying or root causes and then use this information to inform members on how to make the necessary changes. A third point to consider is to look at the business as one whole entity and not the sum of its individual parts. Faletta states that business analysis should occur similar to the medical profession in which a physician takes a holistic view of the patient. They do not simply look at a runny nose and bad cough and think that there must be a problem with the individual's nose and lungs. They look at all symptoms, how they are related, and what course of action is required to remedy all associated symptoms of a common cold. A final important reason to conduct analysis is to determine if the changes made to the organization are actually working. Mavis Gallant once stated, "Success can only be measured in the terms of distance traveled". Such is the case with business, unless the business knows its starting point, it can have no way to determine if it's selected courses of action are working.

Organizational Diagnostic Models

Falleta provided a number of different models that have been developed to conduct analysis in his white paper, "Organizational Diagnostic Models: A review and synthesis". While all are still valid and proven, some appear to be more useful than others. I will quickly review the models presented and provide both strengths and weaknesses for each. Up front, it is important to state what a model should entail in scope, presentation, and applicability. I believe that a model should be simple yet thorough enough to users with a baseline with which to focus his or her analysis. Lines of influence should be easy to understand and the overall structure of the model should not revolve around a catchy acronym or symbol but rather be made to show applicability. Lastly, models should be flexible and easy to apply, allowing a multitude of businesses that have traits unique to their operation, the ability to utilize the basic structure and guidance of that model.

1. Force Field Method - Focuses on driving forces and restraining forces and how management must create / remove forces to get an organization to a desired equilibrium at a desired objective. I believe this model is good in that it provides for a thorough study of influences within the business and provides leadership with guidance on how to change internal influences to achieve goals. A weakness of the model however is that there isn't much focus on external factors (closed in nature), and that while a company strives to achieve equilibrium at a given objective, what if they don't want to stop at that point and want to let the benefit of their actions continue to flourish and take them to unforeseen / uncharted areas of benefit. This model will help to get you from point A to point B, but won't let you continue to point C without re-accomplishing the analysis process.

2. Leavitts Model - Once again this model is good at providing managers with awareness of internal factors as well as the influence that one area has on all areas of the organization, highlighting how a business is holistic in nature. The model fails however to address the effects of the outside environment and is closed in nature, similar to the Force Field Model. A final week area is that it shows interdependence but does not illustrate how managers can apply their vision and goals to an organization.

3. Likert's Framework - This model focuses on the type of leadership that exists within a business. It consisted of 43 questions to determine what type of leadership existed and what changes needed to occur. This model is very good at determining what changes need to be made with the leadership of a business but falls short with showing how that same leadership can effect all branches / areas of the business as well as how an organization as a whole can make changes in an effort to achieve stated objectives. A final weak point is that once again it was closed in nature with not much emphasis on the surrounding environment.

4. Open System - This is an outstanding model. Falleta remarks that the basic premise of this model has shaped countless models since its introduction when he stated, "many models rely on the notion that open system theory is a basic assumption" (Faletta 8). Businesses are living organisms that depend on there environment / surrounding for existence.