Leadership in any organization is the core of its success or its failure. For Starbucks, their leadership system has proved to be quite fruitful because, for the past two years, it has recorded a 38% increase in profit margins and a 17% expansion. This is all thanks to the management applied and also their strategic business practices and their servant leadership (Hunter, 2012). This is the form of leadership whereby instead of the stereotypical governance that involves the making of decisions in the company, they opt to hear out their customers and also their employees for they are the ones on the field who get first-hand data on the organization, what it needs to add or where it has perfected. Starbucks is one of the organizations known to use servant leadership, which has reduced their employee turnover rate and increased their satisfaction (Le Ng, Choi, & Soehod, 2016). The results of such leadership can be seen in the success of the company.
The governing body has set up people on the ground in almost every store across North and Central America to monitor the customer needs and desires and also the customer comments towards the conducting of Starbucks. We can, therefore, say that the relationship that the organization has with its customers is quite close where there is feedback through suggestion boxes and social media platforms. The policies arising involving the modification of the companys transactions are as a result of the gathering of information relevant to the necessary steps to be taken for the organizations welfare. The employees also have a platform whereby they put out their issues or the recommendations for Starbucks in an attempt to handle any given situation.
In normal business settings, the leadership body implements new ideas by will right after acknowledgment of no repercussions whereas, in the servant leadership system, the main issue is the welfare of the customer and the employees. The hiring of employees is done not only by merit but also by going to the round and looking for the people that have a passion for this work. There have been several conventions and team building gatherings hosted by this organization for the sake of knowing their employees much more and also it is the way they single out other potential employees (Davis, 2017). Despite this being the issue, the main aim of any business is for the maximization of profits. This is what the investors want in the long run although they are all after the establishment of good customer relations. This is where any given company may begin to disagree because for there to be profit maximization, there has to be some strict measured set up to control the price and products in the market, and if this is done, the customers may be oppressed in some way.
For the establishment of this organization by the stakeholders, there are obviously some financial targets that had been set, and most of them have been achieved. In the good booming financial year of 2016, Starbucks managed to expand and add three more stores that increased profits greatly; these added stores, however, have tight regulations for the employees and many customers have had some several complaints on unethical happening in the business (Davis, 2017). This has come about because one cannot please the stakeholders by securing the massive profit margins and at the same time please the customers, one has to be disappointed in some way. The greater good for the company, therefore, will be to ensure the profit goals are reached and even passed for the stakeholders to continue their investment. If this is achieved, the next important thing is to perfect the customer relations by making commitments that are to their advantage.
The Starbucks in Detroit offers free coffee on Fridays at 4.20 pm to promote the customer relations and also make the people around the area see that it is all about the promotion of the people in that area. This is exceptionally untrue because the Starbucks branch in that area experienced great losses after it was mugged and as a result the customer numbers reduced. The free coffee is an aim to increase the attendance in the area and to assure protection and the best of services compared to its competitors (Hunter, 2012). This gradually increased profit plowed from the branch and as at today, business is as usual in that chain store. The stakeholders benefited as a result of this, and similarly, the residents in that area enjoyed the free coffee, and this led them to consider Starbucks as their first choice among its competitors.
The behaviors associated with servant leadership may sometimes prove to be not so fruitful because they have to incur minor losses or disappoint some individuals by the outcome of each decision. The disappointed parties may be on the side of the stakeholders or the customers (Davis, 2017). The main thing to note is that it is required for proper estimation of the greater good and to observe which party will be disappointed and the impact that it will have on the organization. Therefore, we can say that servant leadership may create operational challenges in an organization, and that is why it is advisable not always to follow this protocol in all instances.
The greatest benefits that the organization can reap as a result of servant leadership are the establishment of a good relationship between customers and themselves (Hunter, 2012). Autocratic leadership in Starbucks is tricky considering the workforce existent comprises of diverse races and cultures and this is why servant leadership is essential. In the previous year after Starbucks expanded, it increased many various races as their employees and all of them have different beliefs and management goal. This is made functional through servant leadership where the employees air out their grievances and they are dealt with accordingly. This is good considering it will send out a good reputation hence increasing the market structure for itself, eventually filling the stakeholders' pockets. The employee relationship is also strengthened from this leadership tactic and in the long run, we can gauge the organization's performance from the ground and identifying all issues that require attention and making necessary adjustments or increments.
Davis, N. (2017). Review of Followership Theory and Servant Leadership Theory: Understanding How Servant Leadership Informs Followership. Servant Leadership and Followership, 207-223. doi:10.1007/978-3-319-59366-1_9
Hunter, J. C. (2012). The servant: A simple story about the true essence of leadership.
Kay, M. J. (n.d.). Corporate Sustainability Programs and Reporting. Advances in Business Strategy and Competitive Advantage, 307-323. doi:10.4018/978-1-4666-7294-9.ch016
Le Ng, X., Choi, S. L., & Soehod, K. (2016). The Effects of Servant Leadership on Employees Job Withdrawal Intention. Asian Social Science, 12(2), 99.
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