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?

1.0 Introduction:

How can managers be classified in organizations? In traditionally structured organizations.

Exhibit 1-8 shows some of the most important changes facing managers.

EXHIBIT 1-8 CHANGES FACING MANAGER

Exhibit 1-1 shows the level of the managers.

Exhibit 1-1 LEVELS OF THE MANAGERS

2.0 First-line managers

2.1 Definition:

At the lowest level of management, first-line (or frontline) managers the work of
nonmanagerial employees who typically are involved with producing the organization’s
product or servicing the organization’s customers.

Textbook 1: First-line managers are directly responsible for the production of goods and
services. They are responsible for teams and non-management employees. Their primary
concern is the application of rules and procedures to achieve efficient production, provide
technical assistance, and motivate subordinates.

(DAFT:2017)

Textbook 2: At the base of the managerial hierarchy are first-line managers, often called
supervisors. They are responsible for daily supervision of the nonmanagerial employees,
who perform the specific activities necessary to produce goods and services. First-line
managers work in all departments or functions of an organization.

(George & Jones: 9th edition )

Textbook 3: First-line managers make short-term operating decisions, directing the daily
tasks of nonmanagerial personnel, who are, of course, all those people who work directly at
their jobs but don’t oversee the work of others.

Example from the Case Study: (Robbins 2016)

At the end of 2013, the company had more than 200 000 full- and part-time partners
(employees) around the world.

Example from the Internet:

A workforce that heterogeneous in terms of gender, race, ethnicity, age and other
characteristics that reflects differences. Starbucks operates in many countries, therefore it
consists of diverse workforce. So as a manager it is necessary to be well-acquainted with
the diverse backgrounds of individuals in order to manage its workforce effectively. It is
most applicable for the first line managers because they are the ones who are in direct
 contact with employees.

3.0 Middle managers

3.1 Definition:

Middle managers manage the work of first-line managers and can be found between the
lowest and top levels of the organization

Textbook 1:

Middle managers at middle levels of the organization and are responsible for business
units and major departments.They are responsible for implementing the overall strategies
and policies defined by top managers.

(DAFT:2017)

Textbook 2:

Supervising the first-line managers are middle managers, responsible for finding the
best way to organize human and other resources to achieve organizational goals.

(George & Jones: 9th edition )

Textbook 3:

Middle manager implement the policies plans of the top managers about them and
supervise and coordinate the activities of the first-line managers below them.

(Kinichi &Williams: 2015)

Example from the Case Study: (Robbins 2016)

Starbucks’ 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 offer

 Handcrafted beverages: Hot and iced espresso beverages, coffee and noncoffee
blended beverages, Tazo® teas, and smoothies.

 Merchandise: Home espresso machines, coffee brewers and grinders, premium

chocolates, coffee mugs and coffee accessories, compact discs, 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, EthosTM Water, Seattle’s Best Coffee,

Tazo® Tea.

Example from the Internet:

Learning organizations that has developed the capacity to continuously learn adapt and
change. In Starbucks black apron displaying the little and quot; are worn by employees who
have completed the coffee master course, which shows that Starbucks conducts many
programs to enhance the knowledge of workers. This implies mostly to middle level
managers as they are ones who are responsible for meeting the goals set by top level
managers by managing the workplace which includes enhancing their learning and
knowledge.

4.0 Top Managers

4.1 Definition:

At the upper levels of the organization are the top managers, who are responsible for
making organization wide decisions and establishing the plans and goals that affect the
entire organization.

(Kinichi &Williams: 2015)

Textbook 1: Top managers are at the top of the hierarchical level and are responsible for
the entire organization.

(DAFT:2017)

Textbook 2: Top managers establish organizational goals, such as which goods and
services the company should produce; they decide how the different departments should
interact; and they monitor how well middle managers in each department use resources to
achieve goals.

(George & Jones: 9th edition )

Textbook 3: Top managers make long-term decisions about the overall direction of the
organization and establish the objectives, policies, and strategies for it

(Kinichi &Williams: 2015)

Example from the Case Study: (Robbins 2016)

 With more than 19 000 stores in 62 countries, Starbucks is the world’s number one
specialty coffee retailer. The company also owns Seattle’s Best Coffee, Teavana, Tazo,
Starbucks VIA, Starbucks Refreshers, Evolution Fresh, la Boulange, and Verismo
brands.

 “We aren't in the coffee business, serving people. We’re in the people business, serving
coffee.” That’s the philosophy of Howard Schultz, chairman and chief global strategist
of Starbucks.

 Howard Schultz is the chairman, 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, executive vice president, global supply chain; executive
vice president, global coffee;learning business partner; and international partner
resource coordinate.

Example from the Internet:

Nowadays, competition is very fierce and strong, businesses have become more
competitive. So in order to survive in this competitive environment, the manager should
have entrepreneurship skills. These skills include looking for opportunities, innovation and
growth.

Due to these skills, Starbucks has excelled and reached to the height of success.
Starbucks focused on growth in example, the reason they have been able to expend to 11
000 outlets in 36 countries. They also introduced many innovations in their product line. It
is mostly implicated by top managers as they are the ones who make major business
decisions. Top-managers must make serious decisions in such situation to make their
company successful.

Suggestion and Recommendation

The first way that managers’ jobs are changing is in terms of how important customers
are to manager’s job. Because Starbucks’ success is a direct result of how it interacts with
its customers, this is critical. In fact, “customers” is one of the company’s six key corporate
principles. There are critical implications for first-line managers in how customer
connections are created and maintained as front-line partners serve and interact with each
and every customer encounter. For middle managers, the implications would lie more in
ensuring that the resources and support are available for first-line managers in creating
exceptional customer experiences. And for top managers, the implications would be on
reinforcing the corporate principles and establishing a reward system that recognizes and
celebrates those partners who exemplify outstanding customer engagement.

The second way that a manager’s job is changing is in the increasing importance of
innovation. Starbucks Corporation, like many companies, faced critical challenges during
the extended economic downturn. However, the executive team responded with a
full-fledged change effort that encompassed the company from top to bottom. “Doing thing
differently” was a key driver of those change efforts. For all levels of management, the
implications were profound… ranging from being more disciplined and efficient in the
operations side of the business to re-focusing on the long-term future of the company.

The third way that a manager’s job is changing is in how important sustainable practices
are to how a company does business. Sustainability is in the DNA of Starbucks. From the
beginning, the company has been about doing business ethically and responsibly. This
commitment can be seen in the way the company sources its all-important coffee beans to
the way it wants to be a “good neighbor” in the communities it serves. Managers at all
levels of the company need to understand the obligations associated with doing business
sustainability and recognize that they are accountable for how sustainability is practiced
and lived.

Summary

This question wanted 3 current trends and issues facing by Starbucks manager and
explain how and what is the impact and implication to the first-line managers, middle
managers, and top managers. The first way that managers’ jobs are changing is in terms of
how important customers are to manager’s job. Because Starbucks’ success is a direct result
of how it interacts with its customers, this is critical. The second way that a manager’s job is
changing is in the increasing importance of innovation. The third way that a manager’s job
is changing is in how important sustainable practices are to how a company does business.
Managers at all levels of the company need to understand the obligations associated with
doing business sustainability and recognize that they are accountable for how sustainability
is practiced and lived.
P1-9 Give examples of decision that Starbucks managers might made under conditions of
certainty. Under conditions of risk. Under conditions of uncertainty.

1.0 Introduction:

When making decisions, managers may face three different conditions: certainty, risk, and
uncertainty.

2.0 Under conditions of certainty

2.1 Definition:

The ideal situation for making decisions is one of certainty, a situation where a manager can
make accurate decisions because the outcome of every alternative is known.

Textbook 1: Certainty means that all the information the decision maker needs is fully
available. Managers have information on operating conditions, resource costs, or
constraints and each course of action and possible outcome.

(DAFT:2017)

Textbook 2: In a situation involving certainty, people are reasonably sure about what will
happen when they make a decision.

(Heinz Weihrich & Harold Koontz : 2012)

Textbook 3: If all the information needed is available, a decision may be made under a
condition of certainty.

(Gomez-Meija&Balkin&Cardy : 2015)

Example from the Case Study: (Robbins 2016)

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 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.

Example from the Internet:

Perhaps, if Starbucks makes a financial investment that the company is certain will yield a
particular interest rate, it can be said that the company is making the investment under a
condition of certainty (concerning the return on their investment).

(Gomez-Meija&Balkin&Cardy : 2015)

3.0 Under condition of risk

3.1 Definition:

A far more common situation is one of risk, conditions in which the decision maker is able
to estimate the likelihood of certain outcomes.

Textbook 1: Risk means that a decision has clear-cut goals and that good information is
available, but the future outcomes associated with each alternative are subject to chance.
However, enough information is available to allow the probability of a successful outcome
for each alternative to be estimated.

(DAFT:2017)

Textbook 2: Risk is present when managers know the possible outcomes of a particular
course of action and can assign probabilities to them.

(George & Jones: 9th edition )

Textbook 3: The degree of uncertainty about the outcome of a management decision is the
degree of risk.

(Gomez-Meija&Balkin&Cardy : 2015)

Example from the Case Study: (Robbins 2016)

In fact, his intention to restore quality control led him to a decision to close all (at that time)
 7 100 U.S. stores for one evening to refrain 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.

Example from the Internet:

Although Starbucks has already experienced success in these areas, the company is
uncertain about how their customers will perceive future expansion of product lines.

4.0 Under conditions of uncertainty

4.1 Definition:

Managers face decision-making situations of uncertainty. Under these conditions, the

choice of alternatives is influenced by the limited amount of available information and by
the psychological orientation of the decision maker.

Textbook 1: Uncertainty means that managers know which goals they wish to achieve, but
information about alternatives and future events is incomplete. Managers may have to
make assumptions from which to forge the decision even though it will be wrong if the
assumptions are incorrect.

(DAFT:2017)

Textbook 2: When uncertainty exists, the probabilities of alternatives outcomes cannot be

determined and future outcomes are unknown.

(George & Jones: 9th edition )

Textbook 3: Uncertainty means that incomplete information is available to make a

management decisions.

(Gomez-Meija&Balkin&Cardy : 2015)

Example from the Case Study: (Robbins 2016)

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. And rather than gathering together in Seattle, where Starbucks is
headquartered. Schultz chose New Orleans as the site for the conference. Here was a city
still recovering from Hurricane Katrina, which had totally devastated it five years earlier
in 2005. Talk about a logistical nightmare-and it was. But, the decisions was a symbolic
choice. New Orleans was in the process of rebuilding itself and could succeed, too.

Example from the Internet:

As far as conditions of uncertainty, the coffee-bean farm venture in China might be an

example since the political and cultural constraints are unpredictable.

Suggestion and Recommendation

Only rarely, if ever, do managers have the luxury of making a decision under conditions
of certainty. Most managerial decisions must be made without the benefit of having all
pertinent information fully available.

When Starbucks decides to expand its successful strategic initiatives, such as its
ventures into new products extensions, the company is making decisions under conditions
of risk.

As the case study relates, Starbucks has experienced some strategic failures.

Summary

The question is all about under conditions of certainty, risk, and uncertainty. The question
wanted the examples of decisions taken under the condition of certainty, risk and
uncertainty. The examples must be related to Starbucks.