[SOLVED] Selina Lo loves her job as the

Selina Lo loves her job as the manager of a toy store in San Francisco. She loves the chaos and the excitement of kids as they wander around the store searching for their favorite toys. Teddy bears pulled off the shelves and toy trucks left on the floor are part and parcel of managing a toy store. Yet her biggest challenge, which is a problem faced by many retailers, is employee turnover. Many of her employees leave after just a few months on the job because of hectic schedules and long work hours. Selina is always looking for new ways to keep her employees committed to their jobs. She also takes care of customers’ requests and complaints and tries to address them satisfactorily. This is what Selina’s life as a manager is like. However, retailers are finding that people with Selina’s skills and enthusiasm for store management are few and far between. Managing a retail store is not the career that most college graduates aspire to. Attracting and keeping talented managers continues to be a challenge for all kinds of retailers. Suppose you’re a recruiter for a large retail chain and want to get college graduates to consider store management as a career option. Using what you learned in Part 1, how would you do that? or men? Statistics tell an interesting story. In the United States, women held 40 percent of all managerial positions and 21 percent held senior leadership roles, but only 4.8 percent of the Fortune 500 CEO spots. Interestingly, emerging economies have high proportions of women in top positions. In Africa, 89 percent of businesses have at least one woman in senior management, while women are in senior management positions in 87 percent of Eastern European businesses. In Western Europe, 79 percent of French businesses have at least one woman in a senior leadership role, while the United Kingdom has 75 percent. Germany fares worse, with no women CEOs leading their top 30 companies and women holding only 9 percent of positions on executive boards of top companies. Two countries in Asia with high percentages of women CEOs are Thailand (40 percent) and Vietnam (25 percent). By contrast, 10 percent of CEOs in Singapore are women. In Australia, 16.5 percent of CEOs or heads of businesses are women. As you can see, companies across the globe continue to have a large gender gap in leadership. Men far outnumber women in senior business leadership positions. These circumstances exist despite efforts and campaigns to improve equality in the workplace. Where there has been significant VIA, Starbucks Refreshers, Evolution Fresh, La Boulange, Verismo, and Torrefazione Italia brands. It’s a company that truly epitomizes the challenges facing managers in today’s globally competitive environment. To help you better understand these challenges, we’re going to take an in-depth look at Starbucks through these continuing cases, which you’ll find at the end of every part in the textbook. Each of these six part-ending continuing cases will look at Starbucks from the perspective of the material presented in that part. Although each case “stands alone,” you’ll be able to see the progression of the management process as you work through each one.

The Beginning:
“We aren’t in the coffee business, serving people. We’re in the people business, serving coffee.” That was the philosophy of Howard Schultz, chief executive officer emeritus of Starbucks. It’s a philosophy that has shaped—and continues to shape—the company. The first Starbucks, which opened in Seattle’s famous Pike Place Market in 1971, was founded by Gordon Bowker, Jerry Baldwin, and Zev Siegl. The company was named for the coffee-loving first mate in the book Moby Dick, which also influenced the design of Starbucks’s distinctive two-tailed siren logo. Schultz, a successful New York City businessperson, first walked into Starbucks in 1981 as a sales representative for a Swedish kitchenware manufacturer. He was hooked immediately. He knew that he wanted to work for this company, but it took almost a year before he could persuade the owners to hire him. After all, he was from New York, and he hadn’t grown up with the values of the company. The owners thought Schultz’s style and high energy would clash with the existing culture. But Schultz was quite persuasive and was able to allay the ownto many minor compromises that when added up led to a “watering down of the Starbucks experience.” Among his complaints: sterile “cookie cutter” store layouts, automatic espresso machines that robbed the “barista theater” of roasting and brewing a cup of coffee, and flavor-locked packaging that didn’t allow customers to inhale and savor that distinctive coffee aroma. Schulz felt Starbucks had lost its “cool” factor, and his criticism of the state of the company’s stores was blunt and bold. There was no longer a focus on coffee, only on making the cash register ring. Within a year of the memo (and eight years after he left the CEO position), Schultz was back in charge and working to restore the Starbucks experience. His goals were to fix the troubled stores, to reawaken the emotional attachment with customers, and to make long-term changes like reorganizing the company and revamping the supply chain. The first thing he did, however, was to apologize to the staff for the decisions that had brought the company to this point. In fact, his intention to restore quality control led him to a decision to close all (at that time) 7,100 US stores for one evening to retrain 135,000 baristas on the coffee experience . . . what it meant, what it was. It was a bold decision, and one that many “experts” felt would be a public relations and financial disaster. But Schultz felt doing so was absolutely necessary to revive and reenergize Starbucks. Another controversial decision was to hold a leadership conference with all store managers (some 8,000 of them) and 2,000 other partners—all at one time and all in one location. Why? To energize and galvanize these employees around what Starbucks stands for and what needed to be done for the company to survive and prosper. Schultz was unsure about how Wall Street would react to the cost, which was around $30 million total (airfare, meals, hotels, etc.), but again, he didn’t care because he felt doing so was absolutely necessary and critical. In the interim years, Starbucks grew and prospered. In 2017, Schultz stepped down again as CEO and completely cut his management ties to the company in June 2018, although he remains the single largest shareholder. Schultz helped to choose the new Starbucks president and CEO, Kevin Johnson. Johnson has had to figure out how to handle the reality of stiff competition and slow same-store sales growth. One of his first actions as CEO was to close all 379 Teavana stores and sell off the Tazo tea brand. Johnson also had to determine how to respond when two African Americans were arrested at a Philadelphia Starbucks while waiting for a friend. This received a huge amount of media attention—most of it negative and suggesting the company was racist. Johnson earned praise for making a face-to-face apology to the two men and closing nearly 8,000 Starbucks stores for anti-bias training. Johnson also has overseen extending paid paternity leave and paid time off to care for sick family members for hourly employees.2 So we’re beginning to see how Starbucks epitomizes the five Cs—community, connection, caring, committed, and coffee. In this Continuing Case in the Management ers’ fears. They asked him to join the company as director of retail operations and marketing, which he enthusiastically did. Schultz’s passion for the coffee business was obvious. Although some of the company’s employees resented the fact that he was an “outsider,” Schultz had found his niche and he had lots of ideas for the company. As he says, “I wanted to make a positive impact.” About a year after joining the company, while on a business trip to Milan, Schultz walked into an espresso bar and right away knew that this concept could be successful in the United States. He said, “There was nothing like this in America. It was an extension of people’s front porch. It was an emotional experience. I believed intuitively we could do it. I felt it in my bones.” Schultz recognized that although Starbucks treated coffee as produce, something to be bagged and sent home with the groceries, the Italian coffee bars were more like an experience—a warm, community experience. That’s what Schultz wanted to recreate in the United States. However, Starbucks’s owners weren’t really interested in making Starbucks big and didn’t really want to give the idea a try. So Schultz left the company in 1985 to start his own small chain of espresso bars in Seattle
progress is Europe. Many countries there require corporations to allocate a specified percentage of board seats to women. For example, since 2008 Norway has required 40 percent of board seats to be held by women. But women in Norway still only make up 7 percent of CEOs, so progress hasn’t spread evenly across all kinds of leadership positions. To address leadership inequality outside the boardroom, companies like Deutsche Telekom in Germany have set recruiting goals to increase the number of women in their talent pipeline. Deutsche Telekom strives for women to comprise half of their new trainees and for women to make up at least 30 percent of those short-listed for management positions. Some women who have been on track to CEO positions say the problem is not with the leadership pipeline. Instead, it’s at least partly about biases— often unconscious biases—that women face. Women can be penalized for acting forcefully, looked over for challenging assignments, and not fully heard during meetings. Chevron thinks part of the answer to these problems is teaching executives about how unconscious biases may be leading women to opt out of the path to top leadership positions. Chevron invested $5 million in a “Men Advocating Real Change” training effort and has increased the percentage of women on its board to 36 percent. Chevron’s CEO, Mike Wirth, says the company has seen increased innovation as a result of their diversity and inclusion efforts.1
Discuss the following questions in light of what you learned in Part 1:
What issues might Deutsche Telekom face in recruiting women for new trainee positions?
How could it address those issues?
What issues might Chevron face with their approach to addressing the gender gap in leadership, and how could it address those issues?
What are other possible advantages of a company’s diversity and inclusion efforts besides increased innovation?
What could other organizations around the globe learn from Chevron?
Community. Connection. Caring. Committed. Coffee. Five Cs that describe the essence of Starbucks Corporation— what it stands for and what it wants to be as a business. With nearly 30,000 stores in 77 countries, Starbucks is the world’s number one specialty coffee retailer. The company also owns Seattle’s Best Coffee, Teavana, Starbucks
and Vancouver called Il Giornale. Two years later, when Starbucks’s owners finally wanted to sell, Schultz raised $3.8 million from local investors to buy them out. That small investment eventually made him a billionaire!
Company Facts:

Starbucks’s main product is coffee—more than 30 blends and single-origin coffees. In addition to fresh-brewed coffee, here’s a sampling of other products the company also offers:
Handcrafted beverages:
Hot and iced espresso beverages, coffee and noncoffee blended beverages, and smoothies
Merchandise:
Home espresso machines, coffee brewers and grinders, premium chocolates, coffee mugs and coffee accessories, and other assorted items
Fresh food:
Baked pastries, sandwiches, salads, hot breakfast items, and yogurt parfaits
Global consumer products:
Starbucks Frappuccino® coffee drinks, Starbucks Iced Coffee drinks, Starbucks Liqueurs, and a line of super- premium ice creams
Starbucks card and My Starbucks Rewards® program:
A reloadable stored-value card and a consumer rewards program
Brand portfolio:
Starbucks Entertainment, Ethos™ Water, Seattle’s Best Coffee, Teavana teas, and Fontana syrups
As of June 2018, the company had 277,000 full- and part-time partners (employees) around the world. Kevin Johnson is the President and CEO of Starbucks. Some of the other “interesting” executive positions include chief operating officer; global chief marketing officer; chief creative officer; executive vice president of partner resources and chief community officer; global responsibility chief, global supply chain; executive vice president, global coffee; learning business partner; and international partner resource coordinator.
Decisions, Decisions:
After running the show for 15 years at Starbucks, Howard Schultz, at age 46, stepped out of the CEO job for the first time in 2000 (he remained as chairman of the company) because he was “a bit bored.” By stepping down as CEO— which he had planned to do, had prepared for, and had no intention of returning to—essentially, he was saying that he agreed to trust the decisions of others. At first the company thrived, but then the perils of rapid mass-market expansion began to set in and customer traffic began to fall for the first time ever. As he watched what was happening, there were times when he felt the decisions being made were not good ones. Schultz couldn’t shake his gut feeling that Starbucks had lost its way. In fact, in a memo dubbed the “espresso shot heard round the world,” he wrote to his top managers explaining in detail how the company’s unprecedented growth had ledPractice section at the end of Parts 2–6, you’ll discover more about Starbucks’s unique and successful ways of managing. As you work on these remaining continuing cases, keep in mind that there may be information included in this introduction you might want to review.

Discussion Questions:
P1-1. What management skills do you think would be most important for Kevin Johnson to have? Why? What skills do you think would be most important for a Starbucks store manager to have? Why?
P1-2. How might the following management theories/ approaches be useful to Starbucks: scientific management, organizational behavior, quantitative approach, systems approach?
P1-3. Choose three of the current trends and issues facing managers and explain how Starbucks might be impacted. What might be the implications for first-line managers? Middle managers? Top managers?
P1-4. Give examples of how Kevin Johnson might perform interpersonal roles, informational roles, and decisional roles.
P1-5. Look up Kevin Johnson and notice what is mentioned about him. How might his experiences and background affect the way the company is managed?
P1-6. Go to the company’s website, www.starbucks.com, and find the list of senior officers. Pick one of those positions and describe what you think that job might involve. Try to envision what types of planning, organizing, leading, and controlling this person would have to do.
P1-7. Look up the company’s mission and guiding principles at the company’s website. What do you think of the mission and guiding principles?
P1-8. Describe how these would influence how a barista at a local Starbucks store does his or her job. Describe how these would influence how one of the company’s top executives does his or her job.
P1-9. What made Starbucks’s response to the Philadelphia crisis a non-programmed decision? To ensure that store managers across the company use programmed decisions in order to respond in a consistent way to non-buying customers, what would need to be done?
P1-10. Which decision style best describes Kevin Johnson’s approach to decision making? Which decision style best summarizes Howard Schultz’s decision-making approach? Explain your answer.
P1-11. How might biases and errors affect the decision making done by Starbucks executives? By Starbucks store managers? By Starbucks partners?
P1-12. How might design thinking be important to a company like Starbucks? Do you see any indication that Starbucks uses design thinking? Explain.

Question: Selina Lo loves her job as the

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