Starbucks is a company which was founded in 1971 in Seattle, the state of Washington. It specializes in beverages, whole coffee beans, pastries, and coffee- related retail items. Starbuck’s has expanded from 55 stores in 1989 to 2,200 stores currently distributed in major cities globally.
Building on its global growth Starbucks announced a new organizational structure in 2011 so as to promote its growth strategy. In the new structure, Starbucks will adopt a three-region organization form: China and Asia Pacific, America, and emerging markets which include the United Kingdom, Middle East, Russia, and Africa. The president of each region will be directly answerable to the chairman who is also the president and chief executive officer of Starbucks Coffee Company.
The role of each president include: running the company operated retail business, cooperating with licensed and franchised business partners in each market. Other responsibilities include working in tandem with the company’s global consumer products and foodservice team in solidifying Starbucks brands and market share in each region.
Departmentalization is the putting together of related functions into structures that can be easily managed so as to achieve the desired goals of the company in the most resourceful and useful manner. To realize this objective, a variety of means can be utilized e.g. departmentalization by function, process, product, market, customer, location (geographical area) and matrix (project organization).Many business organizations have used a combination of these forms. At Starbucks, a combination strategy and the matrix form of departmentalization have been adopted.
The matrix form of departmentalization has been utilized by most organizations in the past. In this approach, employees with diverse backgrounds and skills that are related to the project are put together and assigned the specific project which should be completed within a set deadline. When the project is complete the specialized employees return to their usual positions. The combination approach makes use of different types of departmentalization. An example is where a company is headed by the president. Under the president are three vice- presidents in charge of marketing, finance and operations. Under the vice president of marketing are: directors of health, governance and education. Under the director of governance are managers’ in charge of specific geographical area. In the above example the first level utilizes the functional form of departmentalization. The second and third levels use market and geographic forms of departmentalization respectively.
Since Starbucks is a large, geographically dispersed and highly diversified, the combination form of departmentalization suits it. For other businesses offering food and lunch, the form of departmentalization that best suits it will be determined by its size, the geographical area it covers, and the level of diversity of its products .Therefore the form that fits a specific company may not work for another company.
Centralization and decentralization both center on the issue of allocation of authority. When small amounts of authority are given out, it is referred to centralization whereas giving out considerable authority is decentralization. The form centralization that a company chooses is determined by its size and intricacy. Starbucks is a very large company that is much diversified and operates in different geographical areas. The decentralized form suits its management because it facilitates quicker decision making, favorable acquisition of skills that can lead to promotion and decisions that are tailor made to suit particular geographical areas.
The best type of organization configuration that suits Starbuck is the line and staff organization. This is a form of structure where specialists are sought to offer support and advice to a line organization. The professionals contribute to problem solving capacity, efficacy and competence of a company.
Starbucks is involved in an industry that is highly competitive as it has many players. The beverage industry is also very dynamic to the shifts in customer demands and introduction of new products. To stay profitable in such an environment requires that the company adopt forms of management that are not costly and effective.