Description about Environment - Business Life cycle - Reward & Pay Strat

Question: Describe about the Background, Environment, Business life cycle and Current Reward and pay strategies of Starbucks Organization? Answer: Background of Organization Organizational strategy Starbucks tries to implement the product improvement strategy by creating well suited product line. They also implement lean techniques for achieving operational excellence (Thompson and Lonnie 1999). They also implement staff development through training and even implemented the quality services to customers. Objectives Starbucks objective is to open 50 outlets in less than 4 years, and gain market share by 75%. They are also working on creating brand awareness (Alfie 1993). Mission To set up Starbuck as best supplier of finest coffee all over world through maintaining unbending principles Values To create warmth culture To act with full courage and give challenge to status quo To connect with respect, dignity and transparency Environment Industry Starbucks operate and compete in coffee retail industry. Due to economic crisis, consumer spending got less on luxury items and they select to purchase low price goods, instead of high price coffee. Coffee industry grew with low yearly growth of 0.9% in 2008-2013 by present revenue of $29 billion in the United States. Its forecasted that it might increase by 3.9% in coming 5 years (Talloo 2008). Business life cycle Coffee retail industry is mature, and Starbucks has more than 60% of market share that gives them power in determining trends of industry (Talloo 2008). US coffee and Snacks retail market share Current Reward and pay strategies Starbucks rewards are its bonus that is achieved through goals achieved, partner discounts, store discount and tuition assistance (Frey and Margit 2002). Their bonus is also based on sales, shrinkage inventory, as well as controllable expenses. They also give bonuses based on performance (Vroom 1964). Conclusion Starbucks gives bonus to their employees on the basis of factors like sales, shrinkage of inventory and controlled expenses. Starbucks also give bonus on the basis of net profits and on the basis of performance of the employees. Pay for performance culture within the Starbucks supports the company in enhancing the motivation of the employees through giving clear direction, tangible rewards, quality feedback, dedication of employees, as well as recognition of the key elements related to job satisfaction. Pay and reward strategies of Starbucks has helped them in improving the retention in the company, and the same is actually improved through meritocratic management or through the pay for performance (Frey and Margit 2002). Through the pay for performance strategy of the company has also helped them in saving the cost, as the company is in the position to give reward to individuals, whose performance could support in achieving the main corporate objectives. Starbucks try to change the viewpoints and behavior of the international consumers to the coffee and this success of the company have caught the attention of customers in global markets (John 1990). As per the Starbucks, motivation is the key factor of companys policy and key to achieve success. Presently, Starbucks is the fastest growing corporation and high profit performance and low employees turnover has helped the company in achieving their objectives. Pay and reward strategies of Starbucks are opposite to the classical management principles, which is mainly concern with workers ideas (John 1990). It is analyzed that cultural values of the company helps the company in successfully managing the diverse workforce and its the responsibility of managers to motivate the employees by formulating good pay strategies. References Alfie, K. 1993. Rewards verses learning: A response to Paul Chance. Phi Delta Kappan, 74, pp. 783 787 Frey, B.S. and Margit, O. 2002. Successful management by motivation: balancing intrinsic and extrinsic incentives. Germany: Springer-Verlag Berlin Talloo, T.J. 2008. Business Organisation Management. New Delhi: Tata McGraw-Hill Thompson, J.R. and Lonnie, A. J. 1999. Student resource: Starbucks Corporation. Strategic management, 11th ed. New York: McGraw-Hill. Vroom, V.H. 1964. Work and Motivation. New York: Wiley. Frey, B. S. and Margit, O. 2002. Successful management by motivation: balancing intrinsic and extrinsic incentives. Germany: Springer-Verlag Berlin John, A. 1990. Understanding motivation. England: The Talbot Adair Press.