Balancing Culture and Growth at Starbucks

Organizational culture is very unique in each organization and in Starbucks it’s a belief in delivering amazing coffee to its customers through exceptional dedication to its employees. Starbucks mission statement states, “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” . Howard Schultz created an original business structure where customers can come every day enjoy fresh coffee and find themselves in comfort, “When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends” . This comfort level would be mutual between customers and employees became the foundation of organizational culture at Starbucks. The common shared values and assumptions which help shape employee behavior were seen in a creation of a partnership between employees and customers. The “Third Place” a home for customers and employees is a perfect definition of Starbucks’ culture which existed since 1971. Culture is an emergent phenomenon and Starbucks was able to build it from ground up where the company assumes that all of the shareholders, employees and customers are part of the organization and any changes that management wanted to make are easily adapted. Unfortunately for Starbucks the rapid growth strategy with a long term goal to open 30,000 stores worldwide appeared to backfire and negatively impact the culture of the company.

Over the ten year period from 1992-2002, Starbucks organization expanded from 1,000-13,000 stores this rapid expansion and managerial decisions that had to be made in order to proceed with this expansion took away from the company’s core values. Howard Schultz points out in his memo in 2007, “We had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and what some might call the commoditization of our brand” . Starbucks was losing its place with customers as a...