Management is the key to business triumph because the success and failure of any business mainly depends upon the role of management. There are varieties of issues and fields that come under the business management like risk management, Human resource management, financial management etc. This paper is aimed at studying different theories and models of business management and in their context the paper present a case study of a coffee retailer company “Starbucks” particularly highlighting the human resource management practice in the organization. By employing a mixed methodological approach the paper strives to collect relevant information about the human resource practice and then the human resource practice is critically analyzed in the light of the different models of human resource management that are discussed along the models of business management. The secondary analysis of data is conducted by gathering information about the topic from different resources like journals, books, magazines; moreover in-depth interviews of human resource personnel of Starbucks are also conducted to have a deep insight of the human resource practice in the company. The primary and secondary sources of information are used to get deep insight on the theory and practice of human resource management in a business organization.
Business management is to make business work efficiently by making the best use of the available resources. The important of effective management is proved by many of the researchers (e.g. Birley, p32, 1985; James Chang, p34, 2001; Neilson, p.71, 2007) and it is an established fact now that for successful business the management has the key role to play and without effective business management an organizations could not expect to be successful or can not even survive in the highly competitive market place of today.
There are varieties of functions or working areas that come under the umbrella of business management including Risk management, Human resource management, financial management, Operational Management etc. Each of these management functions have very crucial role to play in a business organization. While focusing specifically on the human resource management, this dissertation is aimed at studying the issues, concepts, models as well as the real practice of this important management function to get a deep understanding of the importance and role that human resource management plays for a business organization.
The theoretical information about the concept, importance and models of human resource management is gathered with the help of the secondary analysis of data or review of the available literature related with the topic. To have a look at the real practice of human resource management within business organizations, the case study of a business organization “Starbucks” is presented with regard to the human resource management practice in the company. To collect detailed information about the human resource management practice at Starbucks interview has been conducted from a human resource official of the company so that information could be gather about the strategies, planning and issues of human resource management conducted at Starbucks.
Need and Significance of Study
Human resource management is an important field of business management that is gaining more and more importance along with the passage of time as an effective tool that can help the business in meeting it organizational objectives. Along with the understanding of the theoretical issues and concepts of human resource management it is very important to have a look at the real practice of the human resource management in any business organization so that it could be examined that what importance is being to human resource in the business and what are the functions performed in a business related with the management of the human resource. Thus a great need for such study is identified and the paper strives to study the theoretical framework as well as the real practice of human resource management in an organization Starbucks with the help of an interview conducted with human resource personnel of the company.
There is great significance of the study because the outcomes of the study will not only provide a deep overview of all the important issues associated with the concept of human resource management but also present the case study of a business firm to have a look at the real practice of human resource management. The people operating in the business sector will find valuable information and tips that they can use in their firm for better performance. The people concerned with the effective implementation of HRM in the business sector can also find important information from the findings of this study moreover the students of business management and human resource management can also add to their knowledge by going through this dissertation.
Goals of the Study
The study is aimed at exploring different aspects of business management and as business management is a wide concept that’s why one area of business management i.e. the human resource management is selected for the study so that not only the detailed information about the functions, importance and models of human resource management could be gathered but with the help of interview of a HR personnel the real practice of HRM could be witnessed with an organization. Hence the dissertation strives to achieve the following goals
- To study the importance of business management for the success of an organization
- To study the importance and role of human resource management in an organization
- To describe different models of human resource management for evaluating the human resource management practice at Starbucks.
- To present a case study of Starbucks to have deep insight of the human resource management being practiced in the country.
The dissertation is based on studying practice of business management in a selected organization i.e. “Starbucks” particularly the strategies and planning related to the human resource management. In this regard the literature related to the background issues is conducted and this section presents the review of the studies that explained the need and importance of business management, importance, functions of human resource management and models of human resource management so that the human resource practice at Starbucks could be evaluated in the light of the human resource management importance, functions and models presented by different social scientists.
Business Management – Role and Importance
Paul Ankrah (2001) explains that in simple words business management is to make business work efficiently by making the best use of the available resources but the concept and function of business management has changes a lot from what it was in the olden days i.e. in 70s and 80s. Earlier business management was considered as a function that should be performed in engineered way where the business manager was supposed to act as machine operator and the organization was supposed to be a machine. However in the twenty first century the concept of business management has transformed in to a combine process of management and leadership. Now the manager also has to act as a leader and he has to case about the people also along with the tasks.
Birley (1985) defines that management is an important process in the organizations of the businesses and it includes a variety of functions like setting objectives and organizational goals, strategic planning for the attainment of the business goals, management of the all resources, deployment of financial and human assets that will be needed to achieve the business goals and measuring the results of the entire planning, strategies and actions. Along with these important functions the business management also includes the record keeping and storing the facts and information related with the business. He pointed out that business management is not the sole responsibility of the managers or business supervisors but the business management is a process that involves every employee of an organization and each of the employees has given some sort of duty related with the management of the business like reporting function, transmitting information etc (Birley, 1985, p.32, ).
Howard Fingar (2002) point out that to be successful the business management strategies and planning must be effective and well as efficient. Effectiveness is essential in the business management so that there could be a link between the defining and achievement of the business goals and efficiency is required in the business management so that all the resources could be utilized successfully in achieving the business goals. Both of these attributes are very necessary for proper business management because if the managers fail to gain these qualities in the management functions then there is big possibility that they will not be able to successfully manage the their businesses (Howard Fingar, 2002, p.7).
Blythe Camenson (1999) highlighted the importance of business management that effective business management is a key that can open the door of success for organization in the competitive environment by supporting a high performing organizational culture. It is very crucial that every business of today must improve their management function so that they can face the challenges of the highly competitive environment and can have a successful business managed with the help of an efficient and productive workforce (Blythe Camenson,1999, p.21).
James Chang (2001) revealed that the role of manager is very important for a business and there are some very importance responsibilities and functions that must be performed by a manager for effective business management. First of all the managers have to provide a vision that informs about the philosophy of the business and it must be accepted and approved by the high personnel of the business. They also have to possess the quality of take right decisions at right time and while taking the decisions they must be aware of the fact that they will be legally responsible for all the activities and their outcomes that will be performed by the business. The managers must possess the quality to coordinate with all the departments, organizations and people associated with the business for the successful execution of the business plans (James Chang, 2001, p.34)
Neilson (2007) highlights that business management is must for organizations operating at every scale and within every industry. The role of the senior management is particularly of great importance because along with taking several steps and making polices, they also have to provide moral support to all the people within organization and also have to encourage them to perform well. Through these initiatives the managers have the responsibility to create a supporting working environment where the workers can do their best to ensure the success of the organization. An important part of business management is to encourage dialogues between the departments, units and employees of the firm so that in case of any conflict of interest, the issue could be settled down peacefully. To perform all the functions and responsibilities of business management a manager must interact with the people of other organizations so that he can learn lessons from the other’s planning and strategies (Neilson, 2007, p.71).
Brockhaus (1982) revealed that business management is a challenging and demanding function that requires the business managers to take the business towards the right destination. He further explained that business management requires a manager that he must possess an ability to make proper use of the opportunities available to his company. The abilities and efficient working of the business manager not only wins the trust of the employees and the employers but also bring out a highly productive and successful business that performs all the activities and operations in adequate manner. He further explained that the role of the management team is very crucial in the business because only the effective business management can bring success to the company and quality of the management is the success determining factor among different companies (Brockhaus, 1982, p.37). Srivastava, Cooperrider, David (1999) explains that there are variety of functions and activities that come under the circle of business management and for effective management of business now the organizations use to manage different business functions under different department so that the specialized people of that field can take care of the matters related to that department.
Importance and Functions of Human Resource Management
There are many management activities and functions that are performed in an organization under different departments like Risk Management, Financial Management, Human Resource Management, Operational Management etc. All of these fields of business management have their relative importance and significance for organizations however the field that is emerging as the most important tool of attaining business goals is “Human Resource Management” as it performs a variety of functions and activities for an organization and play a vital role in determining the success of a business.
Schuler (1992) explained that in the context of achieving organizational objective, the concept of human resource management is gaining more and more important among all other disciplines of business management. He defines human resource management “use of several activities to ensure that human resources are managed effectively for the benefit of the individual, society and the business” (Schuler, 1992, p. 18) Dr Julian Gould Williams (2002) affirms that human resource management has an important and strategic role to play in the success of a business because it ensure good working relationship between the employers and employees and the creation of comfortable working environment that contribute towards the efficient performance and increased productivity of the organization (Dr Julian Gould Williams, 2002, p.2).
Armstrong (2006) defines Human Resource Management as “key driver of organizational performance” because the efficient performance of work force could be the main factor behind the success of any business. The dramatic changes in the role of HR have alarmed the organizations to construct innovative strategies for human resource management” (Armstrong, 2006, p. 5). Susan Heathfield (2007) defines that human resource management is an important part of business management and the people related with the human resource management have to focus mainly on “recruitment of, management of, and providing direction for the people who work in the organization”. Dobb and Dick (1993) revealed that human resource management is a process within an organization that refers to working with and for the people with the objective of taking the organizations up to its full potential level.
Lawrence, Barnett (2006) noticed that human resource management is gaining more importance in the modern business scenario and the scope of human resource management is also become wider and now a variety of activities are undertaken under this function with the aim to ensure that for the achievement of all the organizational objectives the employees would be utilized in the most effective manner. It is also explained by the researcher that human resource management is a process that starts before the hiring phase when the employers make plan about recruiting work force in their firm and set the criteria and method of selection for them. After making the employment offer the assessment and final selection is done and the selected people are hired and managed by the HR personnel in such a way that maximum productivity could bring out of them so that they can play a supportive role in the attainment of the organizational objectives.
Cherrington (1995) revealed that an important function of Human resource Management is to take care of the ways people are treated in organizations. He also told that Human resource management is liable not only to enter the suitable people in organizations but also to help them in performing their duties by arranging compensations for them and solving their other problems by proving a suitable working environment and offering them attractive compensations and benefits against their performances (Cherrington, 1995, p. 5).
Along with the explanations of the basic concept and definition of the human resource management, the social scientists have also worked out to point out the main functions and activities that come under the human resource management. Walker (1994) identifies four basic functions of human resource as “support, service, consulting, and leadership” whereas Schuler and Jackson (1987) had described that human resource management has six main functions to perform within an organization. These functions are “planning, staffing, appraising, compensating, training and development” (Schuler and Jackson, 1987, p207).
Lundy (1994) explains that the main functions and working areas of human resource management are also verified by the Human Resource Certification Institute (HRCI) and these functions are “management practices, selection and placement, training and development, compensation and benefits, employee and labor relations, and health, safety, and security” (Lundy O, 1994, n.p.). Ulrich (1993) explains that human resource management practitioners play very vital role in the business firms and they add value to the business when they use their experience in creating a link between the internal organization and management practices to external business requirements. In order to perform this important work the HR practitioners must have to follow the four ways which are “executing strategy, building infrastructure, ensuring employee contribution, and managing transformation and change (Ulrich, 1993, p2).
It is revealed from the review of literature that human resource management has emerged as a wide phenomenon that mainly deals with the relations between employees and employers. In addition to this HRM performs a variety of functions and activities for an organization for making the best use of the human resources however it is also clarified that human resource management is not only to bring out maximum of the employees but the employers also have to assure that the employees will be provided with all the deserving facilities and benefits and a working environment where the employees can comfortably perform their duties and responsibilities.
Models of Human Resource Management
There are different approaches being utilized by the social scientists to define a model for the human resource management. Among them the models of Human resource Management presented by Legge (1989), Storey (1989), and Guest (1997) are mostly accepted and used by the researchers and HR experts to evaluate and design the human resource management strategies and activities. Legge (1989) identified that human resource management is of two types; one is Soft HRM and the second is Hard HRM. The soft HRM was given the name of Developmental Humanism whereas Hard HRM is known as Utilitarian Instrumentalism. (Legge, n.p., 1995)
On this approach some other social scientists also work out and put forward it towards the Harvard and Michigan Models of HRM. The Harvard Model is based on “communications, team work and the utilization of individual talents” whereas the Michigan school has “more strategic approach with a unitary outlook, which endorses management’s views. The Harvard Model describes the Soft HRM where as the Michigan model is based on the hard HRM (Legge, 1995).
Legge (1995) explains that according to the soft model of HRM the employees are treated like a valuable asset and it is believed in soft HRM that an organization can achieve success through the “commitment, adaptability and high quality skill and performance” of the employees. (Legge, 1995, pp.66-67) Guest (1997) explains that the Soft HRM places an emphasis on “humans” and there are six dimensions of the soft HRM model. These are:
- HRM strategy
- HRM practices
- HRM outcomes
- Behavior outcomes
- Performance outcomes
- Financial outcomes (Guest, 1997, p. 263)
Whereas the Hard HRM also known as the Michigan model of Human resource Management deals and treat with the humans in the same way like the other assets and resources of the business. Guest (1995) explained that the Hard HRM is basically deal with taking the control of the “performance systems, performance management and tight control over individual activities, with the ultimate goal being to secure the competitive advantage of the organization”. This explanation makes it clear that in Hard HRM, the human resource are treated and managed like the physical assets of an organization.
These models of HRM were further put forward by the social scientist and the concepts of “Best Fit and Best Practice” were emerged. These concepts are also drawn from the Harvard and Michigan models of human resource management. Sparrow and Hiltrop (1994) explains that the concept of Best Fit and Best Practice are concerned with the explanations of the ways through which the implementation of HR and Reward policies can contribute towards the success of an organization (Lawler, E., 1995, p. 14). Purcell (1999) described that the best practice model is not concerned with the strategies of an organization but it is all about the ways that a company adopt to attract the talented and skilled workforce towards their organization (p27). On the other hand Lawler (1995) explained that the best fit model supports the concept that reward system and other benefits can contribute towards the effectiveness of an organization. In this concept the pay system is linked with the business strategy to achieve the organizational objectives (Lawler, 1995, p.14).
Hence these models of HRM are presented by the social scientist that are known as Michigan Model Harvard Model; soft HRM and Hard HRM; and Best practice and Best Fit models of human resource management. These models are important methods of evaluation the human resource management practice in a business and these models are describes here so that the human resource management practice at Starbucks could also be evaluated in the basis of these models.
The dissertation is a “Qualitative Research Study” and the method chosen for conducting the research is “Case Study”. For gathering information about the topic, secondary analysis of data is conducted and an interview is also conducted of the HR personal of the company to get detailed information about the issue.
The company selected for the case study is “Starbucks” that is a well known coffee retailer company of the world. This company is selected for the case study due to its effective human resource management policies and strategies that have made the company one of the best companies regarding the management of the workforce. As there was requirement of studying the practice of business management function that’s why it was necessary that can provide the practical information about different fictions of human resource management. Thus Starbucks was selected because it perform variety of human resource management functions that are studied in detailed in the dissertation and the case study is presented with the help of information about the human resource management practice at the company
Research Question/Problem Statement
“To present the case study of Starbucks to have insight of the real practice of human resource management in a business organization”
The research type selected of conducting the research is Case Study. Case Study is selected for conducting the study because for many years social scientists have been using this research methodology to get help in gaining understanding of a complex issue or object (Susan K. Soy, 1997, n.p).
Significance and Relevance of Case Study
Case study is a commonly used and significant research method that is utilized to analyze contemporary real-life situations. Robert K Yin (1984) explains that case study is an empirical study that aims at investigating any contemporary phenomenon in its real life style context (Yin, 1984, p. 23). The significance of the case studies can also be understood in the light of the main functions that a case study performs for a research
- To explain complex causal links in real-life interventions
- To describe the real-life context in which the intervention has occurred
- To describe the intervention itself
- To explore those situations in which the intervention being evaluated has no clear set of outcomes.” (Yin, 1984, p. 23 )
Thus it is found that case study will be the more suitable research method to achieve the objectives of the research.
Sources for Data Collection
Yin (1984) identified that for a case study it is necessary that data must be collected from at least six sources. These sources are “Documents, Archival records, Interviews, Direct observation, Participant-observation and Physical artifacts”. However it is not necessary that all of these sources must be utilize to gather the information for the presentation of a case study hence for this research “documents and interview” are being used for data collection. In this regards the secondary sources included the books, journals, magazines, newspapers, web portals that are accessed to obtain information about the related concepts as well as about the HR practice in the company is collected. Moreover a primary source of information, an interview of HR personnel is also conducted with the help of a structured questionnaire. The interviewee works at a key position in the Human resource Department of Starbuck however because of agreement of anonymity the name and actual designation of the interviewee is not going to be disclosed in the dissertation.
Significance of In-depth Interviews
Human resource management is a wide concept and for studying the HR practice in any organization it is very necessary to obtain valuable and specific information about the HR practice that could be easily gathered through the secondary sources. Hence an interview is conducted so that specific and detailed information could be obtained about the topic. The significance of interviews for conducting a case study is also approved by Yin (1984) that describes that interviews are most vital source for case study information.
Questionnaire for Conducting Interviews
For conducting the interview a structures questionnaire was prepared that was sent to the interviewee via email before the actual interview so that he can get ready for the interviewee and can provide the answers to the questions quickly and easily. The interview was conducted face to face after taking the appointment from the HR personnel and following questions were asked in the interview.
- How much importance is being given to human resource management in the company
- What is you method or general criterion for the selection of the employees in the company
- What are the different options given to the candidates to become employed in the company?
- In the company programs are arranged for the training of the employees?
- How will you describe the working environment of your company?
- Do you arrange training workshops and seminar for your employees? If yes Hoe frequently
- What is the policy of the company regarding the promotion of the employees?
- Is there any system for evaluating the performance of the employees on yearly or quarterly basis?
- What compensations are offered to the employees on their good performance?
- What are the strengths and weaknesses of the HR practice in the firm?
- Are you satisfied with the current practice of human resource management in your organization?
- What is the general response of the employees towards the planning and strategies of the HR department?
The secondary analysis of the available literature is conducted to gather theoretical information about the concepts and models of human resource management and an interview with the HR personnel of Starbucks is also conducted to get insight over the practice of human resource management in the company. Both of the secondary and primary sources of data collected unfolded various important issues related to the topic. Following are the key information that is gathered from these sources of data collection.
Key Findings of Secondary Reseaerch
The secondary research was intended to get information about the important and role of business management and theoretical aspects of human resource management like its concept, function and models. It is revealed from the secondary research that management playas the crucial role in all the businesses and with our effective management any organization could not expect to survive successfully in the market. For better organization of business management, it has been divided in to several areas or fields like Risk management, Human resource management, financial management and operational management etc. It is very important for a business to pay proper attention towards each of these areas of business management. Among these fields human resource management is an important discipline of business management and there is growing awareness about the significance of human resource management that why it is emerging as an important supporting tool that bring success to the business and negligence of human resource management take the organization at a greater risk of failure. However by the 1970s human resource management was considered as management of the workforce like a physical assets of the business but now it has transformed and accepted as a wide phenomenon that cover variety of activities and now it is also realized by the business people that human resource management must deal with the people while keeping the human perspective at the upper level.
It is also revealed from the secondary research that there are lot of activities and functions that are performed under the human resource management. Some important functions of human resource management identified by the social scientist include “planning, staffing, appraising, compensating, training and development, support, service, consulting, management practices, selection and placement, training and development, compensation and benefits, employee and labor relations, and health, safety, security, leadership, executing strategy, building infrastructure, ensuring employee contribution, and managing transformation and change”. Thus it is clarify from the secondary research that there are variety of functions that have been performed in human resource management and the effective performance of all of these functions and activities possess great importance for a business.
Key Findings of the Primary Research
The main objective of conducting the primary research i.e. the interview was to get detailed information about the human resource management practice at Starbucks so that the information could be use in presenting the case study of the company. It is revealed from the interviews that Starbucks possess a good reputation with regard to human resource management and there are several steps been taken by the company that make its employees feel good about the company and there is very low turn over rate of employees at Starbucks because of the attractive benefits and facilities provided by the company to its employees. The selection of the employees is done in the company according to the criterion set by the management and the employees are also given training for the development of their skills so that they can work efficiently at their positions. Different types of employment opportunities are provided to the people like internship offers, hourly duties, part time or full time. The competitive advantage that the company has over other retail companies is that along with the full time employees Starbucks provide benefits to their part time workers also.
The interviewee also informed that Starbucks is a good working place where there is great workforce diversity, the people are respected and the coordination between the employees is kept at high level so that good working relationship could be build up between them. At present the company is spending more on providing different benefits and compensations to the employees and the amount of human resource spending is greater then the among that the company spend o advertising.
The current situation of human resource management is quite satisfying according to the HR personnel because the employees work with the firm with great satisfaction and in turn they also give their best to the company. The productively of the company is boosted by the efficient performance of the employees and the employees work efficiently because of the friendly behavior and policies of the company. In this way there is an effective and successful relation ship between the employers and employees at Starbucks that is accepted world wide.
Case Study of Human Resource Management practice at Starbucks
Starbucks – the coffee retailer company was established in Seattle in the year 1971 and now it has become a well known and fast growing company of the world. It has also received the prestigious “First Magazine Award for Responsible Capitalism” in 2007 (See Appendix I)
By 2000 there were almost 9000 outlets of Starbucks all around the world and the company is planning to further expand the network of its outlets. At present there are more then 6,000 outlets set up in 30 different countries of the world (Starbucks Homepage, 2007). It was founded by Gordon Bowker, Jerry Baldwin and Zev Sigel (Starbucks Homepage, 2007). All of these three persons were coffee lovers and they started their business with the idea of supplying world-class coffee to Seattle residents at they set up the first coffee store in Seattle. The coffee bar concept was not evolved at that time and only the whole bean coffee was sold at the coffee shop (Center for Management research, p.2, 2005).
The company was growing with slow pace and by 1981 there were four coffee stores then the concept of ready-to-drink coffee by the mug was introduced and espresso also begun to serve at Starbucks from 1985 (Center for Management research, p.2, 2005). The introduction of espresso added to the business of the company and then the outlets of the company were then expanded to Chicago, Vancouver and Portland also. In May 1988 the company entered Europe through the acquisition of 65 Seattle Coffee Company stores in the UK. The company was set up brilliantly in UK and the people were provided good environment and services that’s why the people started attracting towards the coffee shop and Starbucks become a well known company in UK also (Starbucks Homepage, 2007)
Human Resource Management at Starbucks
Starbucks is among the few retailer companies of the world where special attention is given to provide attractive benefits and facilities to the workers either they work full time or part time (Interview of the HR personnel). The growth and development of the company is well supported by its workforce that is kept well motivated and well managed by the company and the top management of the company believes that their committed and motivated workforce is their biggest assets that why they always want to have good relations ship with their workers because the efficient and productive workforce is their biggest tool to compete with other companies. (Interview of HR personnel)
In the year 2005 Starbuck was rated at the second number in the Fortune “Best Companies to Work For” survey with regard to their human resource management policies and working culture (Center for Management research, p.2, 2005). The lowest turn over of the employees at Starbucks also show that the employees want to stick with the company due to benefits and advantages they receive from the company otherwise there is increase turnover in most of the retailers companies. The lower turn over of the employees at Starbucks is contributed by its employee-friendly policies and supportive work culture (Interview of the HR personnel)
Benefits to the Employees
Starbucks has a unique competitive advantage over other retailers companies that it also offers its benefit program to its part time workers as well (Center for Management research, p.2, 2005). This is not a common trend in the retail companies and generally the benefits are provided only to the full time employees. But Starbucks keep their part time employees also close to them (Jill Andresky Fraser, p2, 1992) (See Appendix II) and in this way the company possesses the most productive work force in the industry. The company use to spend more on employees as compared with the amount it spends on advertisement. (Interview of the HR personnel)
Starbucks has introduced Starbucks Total Pay package for its part time and full time workers to provide them following benefits and facilities (Starbucks Homepage, 2007).
- Progressive Compensation Package
- Healthcare Benefits (Medical, Prescription Drugs, Dental and Vision)
- Retirement Savings Plan
- Stock Options and Discount Stock Purchase Plan
- Income Protection Plan (Life and Disability Coverage)
- Management Bonus Plan
- Adoption Assistance Plan
- Domestic partner benefits
- Referral programs and support resources for child and eldercare
- Discounted Starbucks merchandise
- And all partners get a pound of coffee each week.
Selection and Hiring at Starbucks
The company has set a certain standard for the selection of its employees that only the motivated and committed people will be hired in the organization so that they can play a key role in the success and growth of the company (Interview of the HR personnel). The company not only expects the best from its employees but it turn also assures them to provide best facilities and benefits against their services. The company has set a recruitment motto “To have the right people hiring the right people” (Center for Management research, p.2, 2005). This motto explains well the selection criteria and preferences of the company. The company has decided that in the potential candidates of the company there must be some qualities like “adaptability, dependability and the ability to work in a team”. The company offer varieties of working opportunities to the people for example “hourly retail opportunity” allows each of the Starbucks retail stores that it can independently hire their own team and the candidates can contact their nearest store for getting hired in the company on hourly basis if they possess the desired attributes set by the company. In addition to this the company also offers internships during the summer month to the undergraduate juniors and seniors as well as to MBA students. Usually the internships are offered in limited numbers depending upon the need of the business (Starbucks Homepage, 2007).
Training and Skill Development
The company not only looks for good qualities in the candidates but also use to arrange training programs for them so that they can develop all the skills that are necessary for the efficient performance of their duties (Interview of the HR personnel). There are very few retailer companies that use to invest in the training and skill development of the employees and Starbucks is among those companies because the company provides comprehensive training to all classes of employees and even the part time workers are also facilitated by the training and skill development programs of the company (Center for Management research, 2005, p.2).
The company provides training and education to the new employees and for that Starbuck has developed an extensive orientation and fundamental training program for the employees. Under this program following trainings are given to the employees. “Coffee Education, Learning to lead program, Business and Communication classes (Starbucks Homepage, 2007).
Management of Workforce
In the year 2000 the company faced a great challenge. Initially the company was set up at small scale and it was east to manage the small workforce in effective way but when the Initial Public Offer (IPO) were offered in 1992, the company started expanding rapidly and then the management of workforce also become an important issue for the HR managers of the company. When company was operating at small scale they offer attractive benefits to their employees however along with the expansion of the company the workforce also increased also because of their attractive incentives and benefits and then it become difficult to company to maintain that good level of benefits offer for large workforce also. But at the same time the demand for efficient workforce also keep in rising because of the expansion of the company.
In that situation the company has to decide weather to reduce the benefits offered to the employees to cut down their human resource cost or to carry on with same offers and incentives to maintain low turnover rate of employees and the efficient working. However the company continued to provide benefits to its employees but there was increase in the prices of the company’s beverages in 2004 and many of the experts felt that this decision was taken by the company to meet their expenditures on the employees. Hence the company did not compromised with their commitment with the employees and has a firm believe that if they will cut down the employee’s benefits then the morale of the employees will be down and in turn the productivity and efficiency of the entire work force as well as of the company will be reduced (Center for Management research, p.2, 2005)
The human resource management in the company is led by the company’s mission statement that is to “provide a great work environment and treat each other with respect and dignity.” The company also strives to embrace diversity in the workforce. All of the employees have given the chance to speak their opinion and the coordination among different level of employees is build in such an effective way that one employee can learn lot from the experiences of other. (Starbucks Homepage, 2007) The company is committed to build understanding, respect, and appreciation for different people with in the organization so that all of the people can give their best and can contribute efficiently in the growth of the company (Interview of HR Personnel)
Analysis and Discussion
Analysis of HR practice at Starbucks
The case study of coffee retailer company Starbucks unfolded various aspects of the human resource management practice at the company and it is revealed from the study that as a part of business management the function of human resource management is well performed in the organization through strategic planning and policies. The effective human resource management has also rewarded the company in term of high productivity and popularity.
An important factor came out from the case study of Starbucks that along with many other business organizations of the world, the management of Starbucks has also realized that effective management of human resource is very important for the achievement of organizational goals and keeping in view this point the company uses to treat its employee in best possible ways so that they can feel attached with the company physically, morally and emotionally so that they can given their best to the company and ultimately the entire productivity and efficiency of the company will improve. As the management of Starbucks has realized the crucial importance of human resource management, all the important functions of human resource management are also performed in the company like providing benefits to the employees, creation of good working environment etc.
The case study shows that all the important functions of human resource management that have been identified by different social scientists (as discussed in the literature review) are being performed by the management of the Starbucks very well. The company not only provides benefits to the employees but the management is also very keen about the selection of right candidate in the company because they have also realized the importance of recruiting the suitable person at right place that is an important function of human resource management.
The selection of the employee is another important working area of human resource management and it is discovered from the case study of the company that they have decided a particular criteria for the selection of their employees and the candidate that meet all the required conditions is hired in the company. Along with recruiting and selecting the right person at right place the management of Starbucks also pays proper attention towards another important function of human resource management that is training and skill development program. It is disclosed in the case study that the company also use to arrange different training and still development programs for its employee.
There are very few retailer companies in the world that use to provide training to their employee but going against this trend Starbucks uses to provide training to its employees through different programs. This is a valuable facility for the employees that they can get different useful training from the professional and can develop their skills in much better way to perform well. Through this initiative the company not only adds to the skills and efficiency of the employees but when these employees use this training and improved skills in their working within the organization, the overall performance of the business is improved and the company gets the benefits of providing training to the employees.
An important working area of human resource management is to provide attractive and reasonable benefits and facilities to the employees. Starbucks uses to effectively perform this function of human resource management as well and there are many benefits that have been provided to the employees. The company has also taken an important step towards providing the benefits to the employees that the employment benefits are not only offered to the full time employees but also to the part time employees. This is also a trend that is not popular in the retail companies but by taking this step Starbucks have proved that the company cares for all people that work for it wither full time, part time or hourly basis. There are not only financial benefits provided to the employees but they are also given certain valuable facilities like health care, Referral programs and support resources for child and eldercare, Discounted Starbucks merchandise etc.
Moreover the company also offers the employees Progressive Compensation Package and Management Bonus Plan that shows that there is great respect for the good performance of the employees and the workers are also motivated and encouraged to perform better so that they can enjoy the benefits and compensation provided by the company. In this way the employee get reward for their work and the company gets the advantage of good performance of the employees in terms of increased productivity and success of business.
Hence the analysis of the case study of human resource management practice at Starbucks shows that the company is paying attention towards the human resource management and different functions of human resource management are also performed in the company very well. As a result there is complete satisfaction among the employees regarding the ways they are treated by their employers and on the other hand the employers also take the competitive advantages from good performance of the employees in form of success of the business.
Matching with the HR models
After analyzing the human resource management practice at the Starbucks, HRM practice also evaluated on the basis of the human resource management models discussed in the literature review so that it could be found that which school of thought and model of human resource management is followed by the company. As discussed earlier there are two types of human resource management identified by Legge (1989); Soft HRM and Hard HRM. It was explained by the social scientist that the soft HRM is human inclined whereas Hard HRM treat human like assets. The case study of human resource management practice at Starbucks has shown that the company has respect for the employees and they spend more on the employees as compared with the advertisements. Also the offers of different facilities to the full time and part time employees show that the human resource management at Starbucks is human inclined where the employees are not treated like the physical assets of the company and thy are also not neglected to get any other company benefit. Thus the case study of human resource management practice at Starbucks show that in the company “Soft HRM” has been practiced and there are no evidences found that can prove the existence of Hard HRM in the company.
Along with the concept of Soft HRM and Hard HRM two models are also presented by the researcher based on the concept of soft and hard HRM. These two models are Harvard Model of human resource management and Michigan Model of Human resource Management. The Harvard model that is driven from soft HRM is based on “communications, team work and the utilization of individual talents” whereas the Michigan Model of human resource management derived from the Hard HRM has “more strategic approach with a unitary outlook, which endorses management’s views”.
The study of human resource management practice at Starbucks shows that the management is concerned with the development of good working environment, the employees have good coordination and they learn different thing from each other’s experiences and the company also encourage the promotion of individual talent by offering them bonuses and compensations. Hence it is evaluated that the Harvard Model of human resource management is followed at Starbucks because all the basic requirement of the Harvard model are present in the human resource management practice of the company. On the other hand the Michigan model of human resource management view the employees as physical assets and the main emphasis is given to their management for brining our maximum productivity and not to provide benefits and facilities to them. Hence the non existence of Michigan model of human resource management is proved at Starbucks and it is revealed from the case study that the company has adopted the Harvard model of human resource management and the strategies and planning of the companies are also based on the principles and functions demonstrated under the Harvard model of HRM.
The human resource management practice at Starbucks is also judged on the basis of the concepts of “Best Fit and Best Practice” and it is revealed that in the company preference is given to “Best Fit” Model of human resource management because it emphasis on providing reward system and other benefits to the employees so that they can perform well for the company and the management of Starbucks also uses to provide several monitory benefits to the employees to encourage their good performance and in this way the presence of Best Fit model is witnessed in the human resource management practice of the company.
The analysis and matching of the human resource management practice with the models of human resource management shows the following results:
Interpretation and Discussion of the Study Findings
The dissertation present detailed information about the theoretical aspects as well as real practice of business management while keeping the main emphasis on human resource management. The findings of the study revealed that business management is a must for success of a business and with our proper management it is not possible that a company can achieve success and attain its organizational objectives. The importance and significant role of management for business is proved from the study and human resource management has also identified as one of the important disciplines of business management. The importance of human resource management is not only understood with the help of theories and review of the researches but the case study of human resource management practice at a business organization – Starbucks also proves that the success of a business could be led by the human resource because the work force has the power to take the business towards success hence it is very important that the workforce is properly management.
The case study, its analysis and matching with the HRM models shows that human resource management is gaining importance in the business organizations and Starbucks also paid attention towards proper management of human resource because they are aware of the fact that of they want to expand their business successfully then the human resource can work as a fuel for their business and of there business will not be supported by the human resource then they will not be able to achieve their goals hence the company designed many employee friendly policies that contributed towards attracting workforce to the company and after selecting the deserving candidate the company deal with them in friendly manner so that they can work with great attachment with the company. The positive approach of the company resulted in efficiency of the workforce and network of the outlets of the company expand in 300 different countries. The role of human resource management is leading in the development of the company and Starbucks stands as a good example of company that gain success and expansion with the effective support of its workforce.
The dissertation was aimed at studying the business management practice in an organization. In this regard the function of human resource management was selected for the study whereas a coffee retailer company Starbucks was selected to present the case study of the company with respect to the human resource management practice so that the real practice of business management could be observe and examine in the light of the human resource management models and concepts. The dissertation presents the review of the researchers conducted around the topic of business management importance, human resource management significance and models of HRM to present a detailed account of information about the background issues related with the topic.
The dissertation concludes that business management is an effective as well as a necessary tool that can assure the success of a business and like all other disciplines of business management human resource management is also an important area of business management. All over the world businesses now give proper attention towards the effective planning of the human resource so that they can support the success of the organization with the help of good performance of the workforce. The literature discussed in the literature review is approved with the help of the case study of Starbucks. It was explained by the social scientists that there are some important functions of human resource management that should be performed by an organization top achieve its organizational objectives and the case study of Starbucks proves that the company perform all the essential functions of human resource management and in turn it gain success in the achievement of the organizational objectives. Different models of human resource management were also described in the literature review and in the light of the principle described in these models it is revealed that at Starbucks follow the Harvard model of HRM, Soft HRM and Best Fit model of HRM and these models prove to be beneficial for the company because it is effectively managing its human resource in the light of the principles and achieving the organizational objectives because its workforce is efficient and productive.
Armstrong. M. (2006) “A Handbook of Human Resource Management Practice”, 10th edition, (Kogan Page) London
Armstrong M (1992) Strategies for Human Resource Management: A Total Business Approach. London: Kogan Page
Birley, S, The role of networks in the entrepreneurial process, Journal of Business Venturing, p. 32, 1985
Brockhaus, R. H, The psychology of the entrepreneur, Encyclopedia of Entrepreneurship. Kent, C. A. and D. L. Sexton and K. H. Vesper (edt.). Englewood Cliffs, Prentice-Hall, p.37, 1982
Center for management research, Starbucks’ Human Resource Management Policies and the Growth Challenge, pp.1-10, 2005
Cherrington, David J. (1995). The Management of Human Resources, Englewood Cliffs, NJ: Prentice-Hall.
Dr Julian Gould-Williams (2002), “The extent to which HR practices are utilized within local government departments: a preliminary study”, Cardiff Business School Cardiff University
Davis, S. and J. Haltiwanger and S. Schuh, “Job Creation and Destruction,” MIT Press, London, England, 1996
Figen Cakar, Dr Umit Bititci (2001), “Human Resource Management as a Process”, University of Strathclyde
Guest, D. E. 1997, ‘Human Resource Management and Performance: A Review and Research Agenda’, International Journal of Human Resource Management, vol. 8, no. 3, pp. 263-276.
Howard Smith, Peter Fingar.”IT Doesn’t Matter: Business Processes Do”, Wiley, p.7, 2002
Hornaday, J. A. and J., About Characteristics of successful entrepreneurs, Entrepreneurship and venture management, Englewood Cliffs, Prentice-Hall, p.45, 1975
Jill Andresky Fraser, Giving Part-Time Workers Benefits, Why CEO Howard Schultz of Starbucks Coffee provides competitive benefits to his part-time employees, p. 2, 1992
Jackson and Schuler (2005), Managing Human Resources through Strategic Partnerships, Chapter 1, p.4 Thomson Business & Professional Publishing.
Jeff Ericksen, Lee Dyer, “Toward a Strategic Human Resource Management Model of High Reliability Organization Performance”, Working Paper 04 – 02, School of Industrial and Labor Relations (ILR), Cornell University
Jill Andresky Fraser, Giving Part-Time Workers Benefits, Compensation Article, Inc. Magazine Article, pp.1-2, 2007
James F. Chang “Business Process Management Systems”, Gale Publications, p.34, 2001
Blythe Camenson, Real People Working in Business. VGM Career Horizons, p.21, 1999
L. Dobb and P. Dick, Fraser, J. A. (1993). Managing emotions in the workplace: Advice for managers on dealing with employee anxiety in times of change. New York Times, 142, p.25
Legge, K. 1995, Human Resource Management: Rhetoric’s and Realities, Macmillan, London
Lawler, E. (1995) ‘the New Pay: A Strategic Approach, Compensation and Benefits Review’, 27 (4), p.14-22
Lawrence S. Kleiman, Tim Barnett, (2006), “Human Resource Management”. Web.
Neilson T Business Process Management with a Business Rules Approach, Book Surge Publishing, p.71, 2007
Purcell, 1, (1983), The Management of Industrial Relations in the Modern Corporation: Agenda for Research, British Journal of Industrial Relations, March, pp. 1-16.
Purcell, J. (1999) Best practice and best fit: chimera or cul-de-sac? Human Resource Management Journal, 9 (3), p. 26-41.
Paul Ankrah, The Role Of Management In Defining The Business And Strategy Process, Business Management Consultant, Angra dos Reis, Brazil, pp. 5-9, 2001
Randall S. Schuler, Susan E. Jackson, Human Resource Management in the U.S.: The Growth in Importance of the International Perspective”, Management revue, Vol16, issue 1, 2006
Storey, J. (Ed.) New Perspectives on Human Resource Management, London, Routledge, 1989)
Srivastava, Suresh & Cooperrider, David, L, Appreciative Management and Leadership: the power of positive though and action in organization, Williams Custom Publishing, p.98, 1999
Susan M. Heathfield (2007), “What is Human Resource Management?” Web.
Sparrow, P. and Hiltrop, J. (1994) European Human Resource Management in Transition, London: Prentice Hall.
Schuler, R. S. and S.E. Jackson (1987), “Linking Competitive Strategies with Human Resource Management Practices,” Academy of Management Executive, 1(3): 207-219.
SCHULER, R.S, Strategic human resource management: linking people with the needs of the business. Organizational Dynamics, Vol 21, No 1, pp. 18-32, 1992
Schuler, R.S. (1995) Managing Human Resources5th Ed, St Paul, MN: West Publishing Co
Schuler, R. S. (1994). “Repositioning the Human Resource Function: Transformation or Demise, ” Academy of Management Executive, 4(3): 49-60.
Soy, Susan K. (1997), The case study as a research method, Unpublished paper, University of Texas at Austin
Starbucks Homepage, About Us, 2007. Web.
Ulrich D., Human Resource Champions: The Next Agenda for Adding Value and Delivering Results, Cambridge, Mass: Harvard Business Press, 1993
Ulrich, D. (1993). HR Partnerships: From Rhetoric to Results. Unpublished manuscript
Wiley, C. “A Comprehensive View of Roles for Human Resource Managers in Industry Today,” Industrial Management, p. 27-29, 1992
Yin, R., Case study research: Design and methods (1st ed.). Beverly Hills, CA: Sage Publishing, p. 23, 1984