Change management at Starbucks – conclusion

Organizations are in a constant state of change catalyzed by the increased dynamism in the business environment following globalization. For effective growth in such an environment entities need to have strong change management strategies that avert collapse during the change process. Though various theories have been advanced on change management process, identification of concrete steps to lead organizations undergoing change are largely absent. The purpose of this paper was to assess the change management process through a case study on Starbucks. The paper evaluated aspects such as the organization’s approach to controlling challenges that affected the change and the outcomes of the approach, obstacles faced  in controlling the challenges and what helped the entity overcome the obstacles, and the alternative courses of action that would have a pronounced effect.

Starbucks change need was necessitated by a loss in focus on customer experience following a period of overexpansion. Due to the collapse of its common stock market prices following reduced patronage, the entity replaced its CEO with a former CEO and founder of the entity Howard Schultz. On taking over the entity faced two main challenges – job losses that would arise following closure of some stores needed to achieve cost efficiency, and the re-acquisition and retention of customers who had moved to cheaper providers. In managing the first challenge the leadership team’s role modeling and effective communication with affected employees averted any conflicts that would arise with such job losses. On the second aspect of customer acquisition and retention; the entity’s development of better awareness methods; renewed commitment to quality of products and services and;  continued innovation of products that better customer experience and involvement in the  business has seen the entity improve its financial performance in the 2009 fiscal year.

In managing the challenge the entity faced obstacles mainly related to liabilities of the new leadership team. Liabilities such as those of legitimacy, access to information, managing feedback and failure to share the renewed vision were relevant, though to varying extents. By appointing the founder of the entity to lead the transformation process, the company was however able to overcome these liabilities due to the qualifications, prior experience and commitment of the new CEO. Such appointment however may affect the future transition when the successes of the company become individualized. To ensure investor confidence in future transitions, the entity thus needs to develop a sound corporate strategy informed on both the external and internal environment.

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