Organization Development

Implemented in Starbucks
Indiran
Mohd Faizal
Chia Wi Peaw
Lee Yew Hoong
Chong Kuen Soon

MBS141104
MBS141114
MBS141106
MBS141102
MBS141133

Introduction
To identify Organizational
Development (OD) process that
implemented by Starbucks to
accomplish successful organization
change and performance.
Solving problems and managing future
change.

Industry Analysis
Operates within the Specialty Eateries
Industry.
Company that sells specialty and premium
food products
Baked bread, doughnuts, ice cream
Non-alcoholic beverage like coffee, tea and
chocolate

The industry has grown steadily as rising

disposable income levels and higher
consumer spending.

Coffee Shops
Starbucks
Tullys
Peets Coffee
Bakery Stores
Auntie Annes
Cinnabon

Major
Players in
Specialty
Eateries
Industry

Smoothies Stores
Jamba Juice
Smoothies King

Doughnut Stores
Dunkin
Krispy Kreme
Tim Hortons
Ice Cream Parlor
Cold Stone
Dairy Queen
Baskin Robbin

Industry Value Chain

Cultivation

Processing

Preparing

Consuming

Disposal

Resources are used along the process.

Energy and fuel used produced carbon emission, ultimately
contributes to climate change and global warming.
The impact of climate change on the agriculture sector has
also increase the pressure on the industry.
They see the need to be sustainable in order to be more
climate-resilient.

Historical Background
30 March 1971
2000 Western Avenue,
Seattle, Washington

 Founded by Zev Siegl, Jerry

Baldwin and Gordon Bowker

 Moved to 1912 Pike

Place Market in 1976

 1984: Peets
share was
bought by the
other three
owners

 1987: Howard Schultz became the

sole owner
expansion of Starbucks

How does the name Starbucks

come?
A character in
Herman Melvilles
Moby Dick (a
classic American
novel on 19th
century whaling
industry)

 Brainstorming
session: word
begins with St
old mining map
of Cascade
Range with
mining town
Starbo

Starbucks Logo
twin-tailed mermaid, or siren (Greek
mythology)
1971-1986 : Starbucks siren was topless
and had a fully visible double fish tail,
likened to a melusine
1987-1991: breasts covered by hair,
primary colour changed from brown to
green
1992 - 2011: and only vestiges remain of
the fish tails
2011 till now: removing the Starbucks
wordmark around the siren, enlarging
the siren image, and making it green

Branches and Locations

1987: Waterfront Station, Vancouver,
British Colombia and Chicago, Illinois

 1996: Tokyo, Japan

Malaysia: 17 December 1998
17 November 2015: 200th branch

Kosmo! 10 December 2015

 As of September 2015..

23

11

26

3
6
2

Products available in Starbucks

Drinks

Food

Bottled drinks

Smoothies

Bakery

Freshly brewed coffee

Cold brew coffee

Bistro boxes

Ice coffee

Blended beverages

Hot breakfast

Espresso beverages

Kids drinks & others Yogurt and fruits

Chocolate beverages

Tea beverages

Starbucks petites

Fizzio handcrafted

Evolution fresh

Sandwiches, pannis &

sodas
Frappuccino blended
beverages

salads

Gift cards, Gift sets

Tumblers, Cup and mugs
Bookmarks, card holders
Machines: coffee maker, grinder teapots &
kettles
Festive collection

Customers
No.4 for best customer experience
by Global Customer Experience
Management Survey in 2011

Employee
All qualified applicants will receive consideration for
employment
Starbucks College Achievement Plan allows employee
complete degree through Arizona State University

Management Team
Good governance practice ensures business and affairs
accomplished according to stated goals and objectives,
long term interests of shareholder are obliged
Independence requirements of the National Association
of Securities Dealers Automated Quotations (NASDAQ)
and U.S. Securities and Exchange Commission

Board of Directors

SWOT Analysis
Strengths
Diverse product portfolio
Knowledgeable employees
Brand Image and presence in other distribution
channels
Customer bond through value-added services

SWOT Analysis
Opportunities
Entry into the health food market
Emerging international retail markets
Expanding in the single-serve coffee market

SWOT Analysis
Weaknesses
High Prices
Weakening US segment
Brand image affected recalls
Negative Publicity

SWOT Analysis
Threats
Direct Competition
Rising prices of supplies and commodity
Economic state of US

Problem Statement

For the business sustainability, Starbucks committed towards the

social responsibility & initiates to be more environmentally friendly

Environmental Mission Statement

Starbucks is committed to a role of environmental
leadership in all facets of our business.
Understand environmental issues and share
information with our partners.
Develop innovative and flexible solutions to bring
about change.
Strive to buy, sell and use environmentally friendly
products.

Environmental Mission Statement

Recognise that fiscal responsibility is essential to
our environmental future.
Instil environmental responsibility as a corporate
value.
Measure and monitor our progress for each
project.
Encourage all partners to share in our mission.

Problem Statement Cont.

Set goal to the areas of concern in Leadership
in Energy and Environmental Design (LEED)
Certified Stores, Recycling & Reducing Waste,
Water & Energy Conservation & Climate
Change

Problem Statement Cont.

To develop a comprehensive recycling solution for
its paper and plastic cups by year 2012.
To implement front of store recycling in its stores
by year 2015.
To serve 5 percent of beverages made in its stores
in personal tumblers by year 2015.
To reduce energy by 25 percent in its company
stores by year 2015.

Problem Statement Cont.

To purchase renewable energy equivalent to 100
percent of the electricity used in its global company
stores by year 2015.
To reduce water consumption by 25 percent in its
stores by year 2015.
To ensure 100 percent of its coffee is ethically sourced
by year 2015.
To invest in farmers and their communities by
increasing farmer loans to & 20 million by year 2015.

Problem Statement Cont.

To improve farmers access to carbon market and help
them to generate additional income while protecting the
environment.
To mobilize its employees and customers to contribute 1
million hours of community service per year by year 2015.
To engage a total of 50,000 young people to innovate and
take action in their communities by year 2015.
To build and to achieve LEED certification to all its new
stores.

Challenges
Struggling to meet the goal it set on recycle cups
to 5% from existing figure which is 25% of the
beverages.
Manages to decrease more than 17% since year
2008 but in year 2011 the water used by
Starbucks increased to 5% over the year
Completed the installation of energy management
system in its stores but the energy improvement
only improved 4.6% over its baseline level

Challenges
Certified LEED international stores face technical
challenges due to the US based LEED certification
program is still developing.
Stores located in the area that do not provide
recycling infrastructure and landlords who do not
provide recycling services.

Opportunities
Gives the positive image to the consumers and its
employees
Studies show that companies support social and
environmental issues will give the 93%
consumers positive mindset on the organizational
Employees in the organizational will continue
serve and work in the organizational where data
proven less turnover and employees become
support to the organizational.

Opportunities
Longterm marketing strategy for the Brand Image
Attracting people who share the same mission
and value to join the organizational.
Starbucks social responsibility gives the
organizational competitive advantage to enter to
global market easily and to secure the fair trade
market share for coffee.

Model & Theory Burke-Litwin

Model 1 Order Change
st

Transactional Change
OD intervention
directed towards
structure,
management
practices & system
(policies)
nd
2 Order Change
Transformational Change
OD intervention
directed towards
mission & strategy,
leadership &
organization culture.

Warner Burke

Action Plan
(Challenges & Opportunities)

5 Transactional & Transformational OD

Strategy was initiated by Schultz
1) The Social Entrepreneurship with
Starbucks
2) Responsibility as an Organization to
Reduce Global Warming
3) Contribute to Mother Nature and
Restoring the Eco-system
4) Creating an Ethical Supply Chain from the
Seed to Distribution
5) Creating Pathways to Opportunities and
Employment in Global Communities

Social Entrepreneurship
What is SE in Starbucks
address Social or Environmental problem
through business

How is SE implemented by Starbucks

enforce all stores to practice and built by
implementing LEED ( Leadership in Energy &
Environmental Design) status
efficiently utilize water(23% savings) and power
(45% savings)
usage of energy saving LED
design of venting airflow to reduce usage of air
condition
usage of customize paint, coatings materials to
increase heat dissipation
usage of recycled wood for furniture created by
Resultconvicts
: OD 1st order change management

pr

Organization to Reduce Global Warming

How is it implemented
in Starbucks
Invest in renewable
energy
restructuring their
purchasing practice
purchase energy from wind
and solar source rather
than coal burning
generators
This also encouraged
renewable energy
producers to expand their
wings

Reduce greenhouse gas

emission
control & measure on each
process of supply chain
manufacturing plants
store operation
company-owned vehicles

Result : OD Transactional change interventio

To Mother Nature & Ecosystem

How is it implemented in Starbucks
Cultivate recycling program
tri-color bins - municipal to baristas
discount and rebates for customer
who do does not use Starbucks paper cups
who uses own mugs and tumblers

manage waste of milx box, syrups and juices in

orderly manner

Develop technology to produce recycled

paper fibre as packaging box

Result : OD 2nd order change change of struc

Ethical Supply Chain

How is it implemented in Starbucks
Developed in collaboration with Conservation International (CI),
C.A.F.E.
create a long-term supply of high-quality coffee and positively impact
the lives and livelihoods of coffee farmers and their communities.
Farmer Support Centers support farmers in creating farm
management and work plans to achieve their goals.

Result:
- Committed to 100% Ethically Sourced

Opportunity Youth
How is it implemented in Starbucks
Statrbuck assist young peoples gain a skill throught training.
Free tuitions fees for bachelors degree from Arizona State
University (online learning).
Provide learining of customer servicing skills and hands-on
experience for cafeteria setup.

Result : With 73% of its store partners under the age of

24, Starbucks
committing 10% of
all store hires to Opportunity Youth

Commitment to Community
How is it implemented in Starbucks
Starbucks Foundation was founded to supported communities around the
globe.
In 2014, Starbucks gave USD11.4M for community projects, including
Global Fund through the partnership with RED

Result:
-Nearly 60,000 volunteers participated from across 30 countries
on continents
-More than 1,400 community service projects completed
-More than 156,000 hours of service contributed in just 30 days
(thats equivalent to 76 people working full-time for a year)
- Approx. $3.3 million (USD) of financial value invested in
communities through service

Conclusion
OD is a field of research, theory, and practice
dedicated to expanding the knowledge and
effectiveness of people- to accomplish more successful
organizational change and performance.

OD is a process of continuous diagnosis, action

planning, implementation and evaluation - with the goal of
transferring knowledge and skills to organizations to improve their capacity for solving
problems and managing future change.

Starbucks illustrate the power of developing a

company in a way that consistent with the
Organizational Development.
An organization that positioned to be sustainably
successful.