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Technology and Change Management Assignment -

Develop a comprehensive written essay on the topic of organizational resilience in (STAR-BUCKS).

Critically evaluate different perspectives of enhancement of organizational resilience in the specific firm. Writing an academic essay means fashioning a coherent set of ideas into an argument.

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Answer -

Introduction

In the present report, the chosen organization is Starbucks which is basically a coffeehouse chain in America. The company was started in 1971 and presently its headquarter is in Seattle, Washington. It is a global brand having above 23,187 outlets in approximately 64 countries (Dorn, Messner, and Wänke 2016). The prime objective of Starbucks is to become the leading retailer of the finest coffee all over the globe by selling high-quality coffee through high-class customer service. With this objective, they purchase and process high-quality coffee beans to prepare freshly brewed espresso beverages. Varieties of beverages available at the store are, but not limited to, Italian-style espresso, brewed coffee, roasted whole bean coffee, cold coffee, and coffee liqueur. In order to maintain a competitive edge, Starbucks is also engaged in the selling of a few additional products, such as handcrafted beverages, ice cream, sandwiches, pastries, and some other types of snacks. Starbuck managed to create a branded experience for its customers by providing irresistible taste, easy accessibility, and customer satisfaction. It is well known for its five 'innovative filter' measures including, handcrafted, artistic, human, enduring, and sophisticated. Apart from getting an excellent coffee, customers also get a place for socialization and meet up in Starbucks. It is usually considered as a 'third place' for people in between their home and workplace, where they get exceptional coffee, sandwiches, pastries, along with refreshing music. This is the unique selling point of the brand which forces people to devote their few minutes by refreshing at Starbucks.

SWOT Analysis

Strengths

  • The primary strengths of Starbucks lie within strong financial performance which helps in achieving the top position in the global coffee retailer.
  • It incorporates the latest technology to its stores such as high-speed Wi-Fi, prepared Starbuck cards to attract the customer (Chung 2016).

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Weaknesses

  • It is highly price-sensitive and is fully dependent on the price of key input i.e., coffee beans.
  • Recently many environmental activities have protested against its unfair procurement acts of coffee beans from poor farmers. Further accusations include the violation of "fair coffee trade" principles (Dorn et al. 2016).

Opportunities

  • Starbucks has a lucrative opportunity to expand its market in emerging countries like India and China.
  • Further, it can also increase the network of suppliers to diversify the source of input. It will help in becoming less price sensitive on the basis of coffee beans price.

Threats

  • It faces tough competition from local retailers which provides coffee at a minimum price for the niche consumer segments.

PESTLE Analysis

Political

  • Increased taxation on the farmers of those nations producing coffee beans, leads to an increased price for their coffee purchase.

Economical

  • It is usually affected by the exchange rate while operating with international trade. When the currency value of the coffee supplier nation falls, it is a profitable situation for the brand.

Social

  • Presently, the target market for Starbucks is the young people who before coffee than tea.

Technological

  • It uses the latest coffee making machine and takes the help of online booking and payment options to put easy assessment by its customer (Chung 2016).

Legal

  • Each country holds different employment laws and regulations, which it has to consider. For instance, in Israel, they celebrate Sabbath day on Friday and Saturday.

Environmental

  • It should try to produce biologically degradable cups and plates for serving coffee and snacks.

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Relevant theory and criticism defining key aspects of organizational resilience

Organizational resilience is defined as an ability of a firm to anticipate, adapt and respond to the upcoming threat, risk, and opportunities, by successfully achieving its objective. Some of the key organizational theories off Starbucks which motivate the employees to act unified to achieve resilience include (i) Kotter's change theory, (ii) Appreciative Inquiry, (iii) Servant leadership, (iv) Inclusion and diversity.

Kotter's change theory comprises of eight basic steps that helps any organization to accept and implement requisite change, in order to achieve competitive advantage. With the help of Kotter's change model Starbucks can lead the change effectively. This method is chosen in this context, because it has been designed after the research on more than 100 different organizations undergoing change process and thus is more relevant to the present competitive environment (Pollack and Pollack 2015). The requisite steps of this change theory includes, i) Developing urgency, ii) formulating team guidance ii) vision development iv) buy-in communication v) empowering employees vi) short term win goals vii) sustaining acceleration viii) anchoring change.

Appreciative Inquiry is another model towards positive leadership development which can manage organizational change by guiding and orienting employees to achieve the organizational objectives. It is one of the important and exceptional change theory because it inquires the internal and external strengths and weaknesses of each individual (Cooperrider and Srivastva, 2017). This approach will leads to an extraordinary performance of Starbucks in its culture, vision and operation. It basically operates on four different phases, discovery, dream, design, and destiny.

Within the concept of "Servant leadership", the company aims to characterize the behavioral attitude among the team leaders and corporate leaders. It further promotes the "employee first" attitude which cares employee morale and satisfaction. As a result of which, they focus on the need of employees, manage them to retain for a longer period, and improvise a positive working condition at the workplace.

The next change theory approach is linked with "Inclusion and diversity". With this approach, the company holds an anti-discriminatory policy that manages cultural diversity, in conjunction with the basis of gender, ethnicity, religion, and cultural background. Hence, this culture makes it open to all types of customers as well. It is evident that the company is primarily focused on beverages especially coffee. For the customers who would like to eat something with a coffee get the limited option here. To attract customers from different income groups provides medium tier premium range coffee products. However, as this product ranges from premium to the middle tier, which makes it difficult to assessable by financially weak customers. Hence, these customers prefer some other coffee stores.

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Examples of events relevant to organizational resilience

According to the report by Nelson, Haggar, and Martin (2016), there are several critical situations for Starbucks where it handles the situation effectively, so as to sustain its brand image. In the Philadelphia incident, two African American men requested the store manager to use the restroom of the Philadelphia store where they can wait for a friend to arrive. The manager denied to provide a waiting area to them and called the police for arresting them in an acquisition of loitering the store without any purchase intent. Later, these two men were arrested and escorted out of this coffee store. At this incident, public reaction was very loud and furious, as a recorded video of the arrest, went viral into the public domain (Shirdastian, Laroche, and Richard 2017). The video was live-tweeted and filmed by a Twitter user. This video attracted numerous public attention and the company was alleged of racism. This incident revealed that the arrestees did nothing for meriting such a fate. Towards avoiding a critical situation and making the situation worse, Starbucks immediately issued an unequivocal apology and also deliver apologies to the specific person who got arrested (Su, Stepchenkova, and Kirilenko 2019). This approach saved the brand reputation and reduce down the customer's angry reaction.

Similarly, in another context, an organized protest held in the US, with the demand for the boycott of the Starbuck outlets. The protest demanded to close approximately 8000 stores in the U.S., on the rationale for providing employees with bias sensitivity training. According to the report by McCluney, Roberts, and Wooten (2017), CEO Kelvin Johnson apologized in several interviews and requested to identify the cause which leads to such a terrible outcome. The CEO communicated his deep regret and remorse for all that happened and announced to close all its stores for one day towards "racial bias training". The public relations (PR) department also performed on an exceptional level to resolve the issue. In an argument made by McCluney et al (2017), it was illustrated that the kind of training was not that important for the employees of Starbucks, but it proved to be a "Band-Aid" on the damage made to its brand image. The objective of the resilience approach in this context is to convert its every wrong deed into right and show a caring behavior towards worldwide customers.

Overall, it can be learned that in order to resolve any critical issue, Starbucks believes to pay attention to the problem which has become the subject of heightened sensation (Holbeche 2015). Doing so, the vulnerability is assessed and a management plan is devised to resolve the worst case crisis scenario.

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Different models and perspective for enhancement

Starbucks was partially successful in handling the crisis which continued to deter its image for several months. This eventually, forced the brand to announce the closure of 150 Starbucks stores in 2018. A better and advanced crisis resolution model could be incorporated by the brand.

  • First, social media is considered as an effective medium or channel for two way communication during the time of crisis. The customer's video which went viral in Twitter ignited the platform on a firestorm. Thus, despite attending numerous media conferences to resolve the issue, it should have focused more on social media. This is a platform for quick response and clarification for any allegation. It should be active in all social media platforms such as Instagram, Facebook, and Twitter to be aware of the current happenings and respond accordingly.
  • During a crisis situation and brews are considered as one of the most vital audience. It is important for any organization to clarify things and become loyal in front of the employees. This will automatically make them the organization's advocate in a problematic situation. In the racial discrimination issue, CEO Kelvin Johnson sends an apology memo to its entire employees, which made it clear for the employees that the company stands against initial profiling. However, the Starbucks approach was not that effective, which was reflected with the closure of more than 150 stores, as discussed in the report by Tunley, Button, and Shepherd (2018).
  • Organization swimming is considered to be authentic in both good as well as bad times (Holbeche 2015). The true color of an individual is revealed during a bad time or difficult situations, and the same is true for any company involved in the brand acquisition and market competitiveness. Thus, it is advisable for Starbucks to remain authentic and loyal to its customers all the time. This will make them listen and believe the brand despite it is accused of wrong deeds.
  • In any crisis situation, it is always necessary to deliver a combined effort from both the communication team and the legal team. To prove their side, Starbucks should have legal support for their response. Even in situations where the legal response supports the wrong things to do, it is necessary to implement for a global brand like Starbucks. According to Mohamed (2017), it is necessary for the company to dedicate their emotion, heart, and values towards their response and action. This will make the employees, as well as customers, show belief on their side.
  • One of the major approaches during this critical situation is that the crisis plan, which must direct a statement that is to be issued within one hour of the situation going public. In the case of Starbucks, it did not respond for two days and after that, it tweeted (Nelson et al. 2016). This is the prime reason, for the brand not able to achieve full success in terms of organizational resilience. In order to mitigate such a strategy, it is important for the brand to face the public and direct their statements (either apology or clarification) immediately after the issue.

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An argument on the most suitable enhancement of organizational residence

There is no doubt that in most of the scenarios Starbucks was wrong. However, it was able to acknowledge its failure and mistake quickly by accepting the responsibility and formulating a remedy for it. The most suitable enhancement for Starbucks achieving organizational resilience successfully is to release a statement to the public as soon as possible. It is always better in a crisis situation to over-communicate with the public, employees and stakeholders to avoid any rumors fill the void. Hence, for similar crisis situations in the future the company shrewd issues summary statements early and update their action plans. Moreover, new improvements should be communicated as early as possible. In this present digitally advanced society, social media and cable network provides a 24/7 news cycle. Thus, instead of letting these technological devices spreading the negative news of the company, the hired PR agencies should act fast towards compensating the crisis situation and improve their image. In fact, immediately after the crisis breaks out, the PR agencies should release a previously developed statement (Nelson et al. 2016). A holding statement should be developed in advance that can be used in multiple scenarios, in which it is perceived to be vulnerable. Finally, the identification of any crisis situation prior to its occurrence is the most appropriate approach for any brand. For instance, the prime threat for Starbucks is the rising price of coffee beans which has a direct impact on its selling price. This supply chain risk can lead to customer turnover. Moreover, there exists some disruption in the global supply chain for Starbucks, which makes it difficult to operate in developing countries (Mohamed 2017). So, it should try to resolve these issues or find an alternative before it breaks out in a major crisis situation.

Conclusion

In summary, the present report illustrates the concept of organizational resilience, taking a case example of the Starbucks company. Important concepts related to internal organization management as well as market brand image stabilization are discussed. It is learned that cultural diversity management both at internal as well as the external environment is essential. Case example has been discussed from reports, including situational events that emphasize closing the outlets by the public, harassment made to customers by staff, and understanding employees need is shown as an approach for organizational resilience. In summary, it is learned that maintaining resilience based on situational context is essential for market survival, maintaining and retaining a competitive advantage as well as for smooth conductance of operational procedures. It is believed that the information presented here can be used in another organizational context as well, in the form of an organizational resilience approach, to maintain the brand positioning in the market.

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