Analyze the culture and structure of the industry

The term organizational behavior indicates the behavioral aspects in the workplace. In order to develop the behavioral understanding of the employees, effective organizational behavioral practices are needed (Biermeier-Hanson, 2015).  It can be denied that creating proper workplace environment, every organization needs to follow the positive characteristics of organizational behavior (Ashkenas et al., 2015). Positive organizational culture helps in terms of improving the interrelation between the employees and customers. The purpose of this study is to shed light on organizational culture of Starbucks in the Australian market. Starbucks is America based coffee selling organization, which has got strong position in the global market.  However, in case of Australia, it has faced the huge failure due to its improper organizational culture. The study has examined the behavioral issues of the organization and its impact on the business improvement. At the end of this study, measurable recommendations have been provided that can help Starbucks to overcome the challenges.

In the words of Hogan and Coote (2014), coffee has become a global commodity and due to this reason in different countries coffee shop culture have been introduced by adding their own flavors. By adding own histories, the coffee culture of Australia has become famous in the world. In case of Australia, it has been identified that a well-established coffee shop culture is being shown in this country. In case of urban areas the emerging Australian coffee culture has been adopted after the migration of southern European people. The espresso culture has been transformed over the time and most the cases, the family owned independent coffee shop business is shown in Australia. Analyzing the industrial culture in Australia, it has been identified that strong organizational culture is being followed in this country. Customer satisfaction is the effective leadership practices are the major influential factor in the well-established Australian corporate culture (Thompson, 2014). As the study has already discussed that Australian coffee shop culture has been developed depending on the country heritage and history, in that the large portion of customer satisfaction depends on the emotional and cultural values. In the words of Withey and Gellatly (2015), strong and effective management practices are being followed by the coffee selling industry. Therefore, examining the coffee culture in Australia, it can be said that the industry aims to focus on employee engagement and customer satisfaction by maintaining the country’s values.

On the other hand, it cannot be denied that the organizational structure is one of the major key drivers in business development. As stated by Brettel, Chomik and Flatten (2015), a strong organizational structure can help in terms of providing the efficient service to thee customers. In case of Starbucks, it has been identified that the company follows matrix organizational structure. The functional department of Starbucks maintains feature related hierarchy. The top-down monitoring process is being done by the department. Teams work under the functional department. In each café, the company appoints organized team for delivering standard quality of services. Teams is being used as the important centralized component in the entire organizational structure and in case of establishing the customer-centric field support, an effective team leader is being appointed in every branches. In the below diagram, organizational structure of Starbucks has been shown.

OB issue in Starbucks

Analyzing the current situation of Starbucks in Australian market, it can be identified that slowly expandable strategy has been followed by Starbucks in this country. After completion of rapid launching process the company did not provided opportunities to the Australian customers for appetizing to the company (Abc.net.au, 2018). Analyzing thee organizational issue of Starbucks, lack of understanding of Administrative theory has been identified. In the administrative theory, different departments are being introduced for accomplishing the entire organizational task in an effective manner. In the words of Thompson (2017), by following the administrative theory, it becomes easier for the organization to achieve its goals in the diversified working culture. In this theory different human behavioral factors are being discussed.

Due to its world wise brand popularity, the management was over confident regarding the success of the company in Australian market. It cannot be denied that coffee culture in Australia is totally different from American coffee culture. In that case, it becomes harder for the American company Starbucks to fulfill the expectations of the customers. In case of Starbucks, it can be said that the company has not followed the administrative theory in the workplace, as its result, it become harder for the employees to cope up in the Australian coffee shop culture. Analyzing the Ethical principles, it can be said that cultural heritage conservation is very important to be followed by the organization to fulfill the emotional needs of the customers. Examining the coffee shop culture in Australia, it has been identified that historical values are the major priority of the coffee industry, in that case, Starbucks has failed to fulfill the customers value, due to lack of understanding of the cultural principles.  

On the other hand, thriving Australian Coffee culture is biggest threat for the American coffee brands. Large customers in Australia prefer espresso and which has created dissimilarity for Starbucks in the market. Hence, it can be said that without any research, Starbucks entered in the Australian market. Due to lack of understanding of the customers’ need, the products of the company have not been appreciated by the Australian people. Due to this reason, within first 7 years of entering in the Australian market, $105 million loss has been faced by Starbucks and in 61 locations it had closed its stores (Abc.net.au, 2018).

As stated by Wikström and Treiber (2016), in the theoretical aspects it can be said that situational theory of organizational behavior has higher level of significance in terms of providing the mathematical foundation to the situational systems. In the year 1980, Keith Devlin and Jon Barwise developed the situational theory. In this theory it is mentioned that in case of bringing the business development, the organizations needs to focus on bringing the required changes its service pattern for adjusting in the new market. In the situational theory, the situational analysis of a management is being defined. It has been discussed that it is the responsibility of a leader to analyze a situation and depending on the situation the organizational functional pattern needs to be changed. Due to lack of understanding for situational consequences, Starbucks has made some mistakes. Although Starbucks recruited the efficient employees in the Australian stores, but cultural barriers have brought major challenges for the company. Most of the stores, the American employees were recruited by Starbucks, in that case the cultural gap between the employees and the customers has created dissatisfaction among the employees. Analyzing the taste of Australian people, it has been identified that they prefer organic products. Starbucks failed to serve organic products to the Australian people, which has also influenced its failure (Sbs.com.au, 2018).

 As most of the employees in Starbucks are American people, they are unaware of the values of Australian people (Sbs.com.au, 2018). By adopting product optimization strategy, Starbucks has mainly focused on the US stores, in the meantime, due to improper guidance to the employees, the cultural diversification in the workplace created barriers for its development.  Due inappropriate implementations of leadership strategies in the workplace, the religious issues have been occurred in the workplace, which has influenced organizational culture.

Analyzing the entire situation in Starbucks, it can be said that due to lack of understanding and proper leadership implementation are the major key driver of the company failure. Due to lack of efficiency and understanding of the customers’ need has brought tough situation for the company. In that case, research and development practices can be beneficial in terms of understanding the needs and demands of the customers. Due to lack of proper leadership practoces in the workplace, the cultural barriers between the American employees and Australian customers has been increased. In this situation, effective transformational leadership practice needs to be introduced in the workplace. Analyzing the organizational culture in Starbucks, it has been pointed out that rather than understanding the taste of Australian people, sweet coffee items are being served by Starbucks, which created dissatisfaction among the customers. In order to deal with the situation, the company focus on bringing changes in its menu.

Depending on the preference of the customers, the items can be launched in the Australian market. It cannot be denied that Starbucks does not follow the ethical principle of heritage conservation. The study has repeatedly discussed that the customers in Australia, give high priority to their history and heritage. In that case, a monitoring team needs to be developed in the workplace, which will work to deal with the cultural barriers in the workplace.

Recruitment of Australian employees can be beneficial for dealing with the diversified culture in the workplace. If the company will recruit Australian employees, it will be easier for them to understand their needs. On the other hand, customer satisfaction needs to be the first priority for the company in order to sustain in the competitive Australian market. Feedbacks of the customers, needs to be addressed in right manner. With this initiative, it will be easier for the company to deal with the emerging customer complaints.

Training and development is very important for bringing the situational awareness in the workplace. It cannot be denied that the employees in Starbucks are not efficient enough to manage the cultural expectations of the customers. Due to this reason, business revenue of the company has got affected. A training development team needs to be appointed for improving the efficiency of the employees. In order to encourage employees for dealing with the diversified culture, knowledge and information regarding the cultural values needed to be shared. Proper monitoring process needs to be developed in the workplace, so that management can identify the weak employees and train them properly. Strong organizational policies needs to be developed so that discrimination can be avoided.

In order to improve the organizational culture, Maslow hierarchy of needs theory can followed. In that case, understanding the needs of the customers, different discount offers can be introduced. Due to recent failure, Starbucks has faced negative impact in its brand image. In this situation effective marketing strategies needed to be developed by the company. Both the direct and indirect marketing policies are required for developing its brand image in the competitive market. Quality measuring initiatives can also be beneficial for assuring the standard quality of products. Analyzing the demands of the Australian customers, it has been identified that most of the Australian customers prefer the organic products, therefore, a separate organic product section needs to be developed by the company especially for the Australian market. Lab testing of the products can help to assure good quality of products for the customers.

Conclusion

In the above study, it can be concluded that effective organizational culture has higher level of contribution in terms of bringing the business development. In order to sustain in the competitive business environment, the positive organizational culture is required. Analyzing the organizational culture of Starbucks, it has been identified that although the company has developed strong image in the global market, bit in case of Australia, due to lack of understanding of the customers’ demands, the company has faced major barrier. On the other hand, it is true that huge different between the Australian and American coffee shop culture, it has become challenging for the company to satisfy the customers’ need. In this situation, effective leadership practices, motivational techniques, marketing practices have been suggested in this study that can help Starbucks for sustaining in the competitive market.

References

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Hogan, S. J., & Coote, L. V. (2014). Organizational culture, innovation, and performance: A test of Schein’s model. Journal of Business Research, 67(8), 1609-1621.

Sbs.com.au (2018). Retrieved from: https://www.sbs.com.au/news/thefeed/story/why-starbucks-just-cant-crack-australian-market[ Accessed on 11^th Nov, 2018]

Thompson, J. D. (2017). Organizations in action: Social science bases of administrative theory. Routledge.

Thompson, J. D. (2017). Organizations in action: Social science bases of administrative theory. Routledge.

Wikström, P. O. H., & Treiber, K. (2016). Situational theory: The importance of interactions and action mechanisms in the explanation of crime. The handbook of criminological theory, 415-444.

Withey, M. J., & Gellatly, I. R. (2015). Organizational Structure, Situation Strength and Employee Commitment: Test of a Process Model. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 14587). Briarcliff Manor, NY 10510: Academy of Management.