starbucks-organizational-structure

Starbucks Organizational Structure In A Nutshell

Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.

Understanding the Starbucks organizational structure

Starbucks is a large and popular café chain, with over dozens of thousands of stores in 70 countries around the world.

The company is one of several large multi-national corporations to successfully implement a matrix structure. In general terms, a matrix structure consists of functional and product-based divisions with multiple chains of command. It is also well suited to organizations that have a diverse range of products or services.

Starbucks is controlled by a board of directors who operate in the company headquarters of Seattle, Washington. In the United States, the company is split into regional jurisdictions run by district managers who oversee a group of stores. Each store is run by a store manager and shift supervisor who oversees a group of staff.

Importantly, Starbucks promotes an inclusive culture among its staff. The company seeks to recognize exemplary employee performance and encourages them to develop hard and soft skills – regardless of title or pay bracket. With these skills, Starbucks gives employees the autonomy to serve customers in a way they deem best. Given that authority and empowerment are given to low-level employees, the company can also be said to incorporate aspects of a flat organization structure.

The four elements of Starbucks organizational structure

There are four key elements to the Starbucks organizational structure.

Below we will take a look at each in more detail.

Functional hierarchy

Functional hierarchy refers to the grouping of departments according to business functions. Examples include the human resource and marketing departments.

It should be noted that functional hierarchy is the most traditional aspect of the matrix structure. Much of the decision-making in each Starbucks department is centralized and only occurs at company headquarters. For instance, the corporate human-resource department makes policy changes applicable to every Starbucks café.

With the CEO at the helm, functional groups exercise top-down control to develop and then execute competitive growth strategies.

Product-based divisions

Starbucks also has several product-based divisions. These encompass divisions for coffee, merchandise, and baked goods to name a few.

They also include divisions for the numerous brands operating under the Starbucks banner, including Evolution Fresh juices and Teavana bottled teas.

Geographic divisions

With a presence in 70 countries, optimizing the structure of geographic divisions is vital for Starbucks.

In 2011, the company ditched the Starbucks U.S and Starbucks Coffee International (SCI) divisions to create three new regions:

  1. Americas – further divided into the Western, Northwest, Southeast, and Northeast United States.
  2. China and Asia-Pacific, and
  3. Europe, Middle East, Russia, and Africa.

Each division has a senior executive who is given flexibility in adapting strategies to the particular geographic region. The senior executive reports to both the geographic head and the functional head.

Teams

Teams are invariably found in Starbucks in every Starbucks café. The company understands that team performance and good customer service drive the financial success of every location.

As noted earlier, teams are motivated and empowered to perform in such a way that they further personal goals and enhance Starbucks’ corporate culture.

Key takeaways

  • Like many successful multi-national corporations, Starbucks employs a matrix organizational structure. The matrix structure is characterized by multiple chains of command and combines aspects of product and function-based structure.
  • With a focus on low-level employee empowerment and autonomy, Starbucks also embodies some aspects of a flat organizational structure. However, the company retains a strong preference for hierarchical corporate governance.
  • Starbucks also has product-based divisions to help structure the various product categories and brands for sale in each café. It also utilizes geographic divisions to simplify the management of its global presence.

Read Next: Organizational Structure, Starbucks Business Model, Starbucks Mission Statement, Starbucks SWOT Analysis.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"