Internal Corporate Communication Starbucks

Internal Corporate Communication Starbucks

The concept of communication is a very vital one that companies and organizations all over the world cannot survive without. Effective utilization of the communication strategies in a company results into optimization of resources, upgrade of quality and harmonization of the workplace environment. Everything flows better when there is communication between the two groups, that is, the management and the employees (Sharma & Kamalanabhan, 2012).

The realization of the goals of a company depends largely on the way the parties, which are instrumental in achieving them, interact. If the communication strategies are well defined, then a more efficient workforce is realized. Each company employs internal communication strategies based on its own concept. One strategy can work well in a particular company, but is a total flop in another company.

In that context, it remains that companies need to have their own differentiated mechanisms to know, which specific communication strategy they should employ. Since the goals of the internal communication strategies are to create an efficient workforce, it is vital that a company identifies the strategies that it is supposed to implement.

This paper will have an illumination into the concept of internal communication and identify the effect of this strategy in the companies that have utilized this strategy. In doing so, the researcher will take an outlook into a major company, in this case Starbucks, and identify how this company utilizes internal communication strategies and the effect the strategies have had on the company. To do so, the history of Starbucks will be given and the major tenets of this internal communication strategy in the company are analyzed.

Internal Corporate Communication Defined

Many scholars have different definitions of the internal corporate communication depending on their understanding of this concept. However, the definitions have a point of convergence where the relationship between the management and the employees is identified.

According to Bronn (2002), corporate communication is defined as the cues that a company offers both internally and externally through utilization of symbols, communication strategies and even behavior. Bronn (2002) states that the internal communication is very important for company’s success. Though the external communication strategies are not rendered any less, the internal strategies are what determines how the company operates and how it is branded. Dolphin and Fan (2002) agree with this notion brought forth by Bronn (2002) and add to the definition of this concept as being a process, by which a particular organization communicates with its various audiences to the mutual benefits of both and to its improved competitive advantage. The audiences are identified as the employees in this company. The employees of any particular company are the most important cogs in the machine. They are the drive from which the company draws its breath. If there is no strategy and mechanisms in place to ensure that the flow of communication between the management and the employees is effective, then this might result in the companies falling short of achieving their goals.

Bambacas and Patrickson (2008), quoted in Chalmers (2008) goes on to argue that the concept of internal communication is designed to encompass other areas and issues such as  the building of effective relationships, focusing on the business, coaching, consultation among other inherent factors in the company. Internal communication strategies are supposed to build a strong employee relationship. The more motivated an employee feels, the more he or she is capable of delivering. Opening up lines and channels of communication between these employees is one of the best motivation factors in a company. Through the concept of internal corporate communication the employees are given more exposure and the flow of information ensures that the job gets done in the timeframe set.

Internal corporate communication has many benefits if well utilized. The concept encompasses the proper planning of the company, organizing and most important of all, the link between the employees and the management is defined in this concept. Internal corporate communication aims at ensuring that the company is well structured internally. In other words, the wellness of the company has to come from how good it is structured internally. Before the company takes care of the external factors, that is, the external positioning and exposure, the company has to make sure that its working environment is flowing smoothly. This is done by making sure that the employees are well taken care of. The employees are the outlook of the company. This implies that they perhaps know much more about how the company is positioned to perform compared even to the managers whose job is to supervise them. The management should listen to what these employees have to say and adapt the workable policies and opinions that these employees give them.

Starbucks’ History

Starbucks is purported to be the biggest coffee making company in the world. Starbucks dates back to 1971, when the first coffee place was opened in Seattle, Washington by three entrepreneurs, Jerry Baldwin, Zev Siegl, and Gordon Bowker. Gaining their inspiration from the coffee businessman Alfred Peet, they started selling top-quality coffee and coffee making equipment. At the onset, the company name was planned to be Pequod, but this name was not approved by a few co-founders in preference to Starbuck.

At the beginning, the Starbucks Company only oriented on the sale of roasted coffee without venturing into brewing coffee for sale yet. Their friend, Alfred Peet was the main supplier of the coffee beans during the formative years and after that, they began buying the coffee beans directly from the producers (Starbucks website, 2012). In 1984, Starbucks purchased Peet’s and their sales soared.

Sales of special types of coffee that Starbucks brew increased tremendously in the 1980s, with a jump from 3% total market share to over 10% by the year 1989. The specialty coffee sold by the company was espresso and klater cappuccino.

Later the start-up owners of Starbucks, Jerry Baldwin, Zev Siegl, and Gordon Bowker  sold Starbucks to Howard Schultz. Schulz rebranded the Starbucks Company and embarked on the expansion journey. He first changed his own Giornale places into Starbucks and then pushed for the creation of numerous other outlets all over the world.

The first outlets that Starbucks opened were outside Seattle in Vancouver and Chicago. The expansion was rapid and unprecipitated.

The company went public in 1992 and appeared on the stock market. By 1992, Starbucks grown to be a giant coffee company with over 140 outlets with annual revenues of $74 million dollars. The company grew very large after that and stores were being opened on an average of four stores a week.

Starbucks products are differentiated. The company sells hot as well as cold drinks, roasted coffee beans, salads, hot and cold sandwiches, pastries, snacks, and branded items such as mugs and tumblers. Starbucks has also diverged into other types of products. Some of these are music through the Starbucks entertainment division and the brand of Hear Music. The Starbucks Company also markets books, music, and film.

With a company of such magnitude as Starbucks, there has to be very well laid down strategies that allow the employees with different cultures and the management to flow into a smooth way. Starbucks employs the concept of internal corporate communication in all its outlets and this is among the best strategies that have made the company become recognized as the best maker of coffee in the world. The utilization of this concept of internal corporate communication in the Starbucks chains will be outlined in the following discourse under different subtopics namely the internal corporate communication, the institutional framework, the leadership style and the brand image.

Internal Corporate Communication at Starbucks

Starbucks has employed the utilization of internal corporate communication in all the outlets under this brand. The employment of this strategy has seen the company achieve monumental growth in a span of very few years. The corporate governance and structure in the company has encouraged the open communication mechanisms between the employees and the management. Starbucks governance promotes simplicity. The levels of bureaucracy in the company are almost non-existent. The employees are at liberty to communicate directly with the management. The interaction between the employees and the management is very frequent. The employees are encouraged to have interactive sessions by keeping the communication channels between the management and workers open. To enhance this, the managers make frequent visits and random enquiries. They relate with their employees directly and discuss with them the matters affecting a company.

This way, the employees are capable of airing their grievances to the management directly. The management then responds immediately. The complicated process of going through a number of levels to air their issues to the management has been done away with. This ensures that the employees are capable of having a high level of interaction with their bosses. Through this, they can give their opinions on how to develop the company more, they can have a platform to offer complaints if they feel that something is not going according to the intended way. Managers make trips that are designed to interact with the employees in all of the Starbucks outlets.

The management of Starbucks then logs in those opinions and responds to the complaints made by these employees. This way, things move very quickly. Decisions are made fast and the employees are consulted in this process enabling them to feel more appreciated. It is very important to make the employees of a particular company feel appreciated as this translates into improved production through more input (Welsh and Van, 1981). Starbucks has seemed to understand this concept and has assimilated it so well. Team building has become one of important employee’s motivation factors in the company. Employees are taken out and given sessions that are meant to improve the communication between them. The employees are taught how to survive and respect each other in the company irrespective of the differences in their culture.

Training in house is also another way in which Starbucks aims to have increased internal corporate communication. The outlets have stipulated hours in which they close business and embark on the training of their employees. This act not only improves the quality, but it also has an impact on the way these employees interact.

The Starbucks Snstitutional Framework

The institutional framework of Starbucks is very straight and simple. The company works on acquisitions and rebranding of other stores. After the company went public, the necessary resources required for the acquisitions were made available. The strongest institutional framework of the company entails expansion. Since its inception, from a single outlet, the company has grown to have over two thousand outlets all over the world by the year 2012 (Starbucks website, 2012). The notable acquisitions of the company include Peet’s, which was the first company to be purchased by Starbucks chain of hotels and coffee houses. Others include Giornale coffee outlets, which were originally owned by the Starbucks CEO, Howard Schultz and later rebranded to Starbucks. Others are Circadia and the Seattle’s Best Coffee among other major outlets. This expansion has defined the way this company has been run.

The management of the Starbucks chains of outlets and restaurants runs on a very simple code. A person willing to set up a Starbucks outlet would have to adhere to strict codes. These codes are the ones that define the company. The company requires all their outlets to brew their coffee from a specified grade to avoid compromising their quality. The expansion into many different nations has commanded a presence for the company. The company is viewed as a strong competitor in the coffee making industry. This kind of institutional framework has made the company become a front runner in the implementation of internal corporate communication strategies.

The Leadership Style in Starbucks

Technically, the Starbucks company is run through a structured management style with the CEO at the top and a board of directors is run by a chairman. The current CEO of the company is Howard Schulz, who had bought the company from the original founders. The style of leadership in the company is based on simplicity. The CEO of Starbucks has managed to have the company operate as a small company despite its great growth.  The shareholders of the company convene every year in an annual general meeting to make sure that the policies they want in the company are implemented.

The CEO, who also doubles as the president of the company, reports directly to the chairman of the board of directors. The board of directors ensures that the policies that they make and those made by the shareholders through a voting process at the annual general meeting. The board acts as a watch dog to ensure that the policies they want done are implemented. Under the CEO are the vice presidents followed by the various managers who run the various outlets.

Branding in Starbucks

Branding allows any company the capability and advantage of exposure. If a brand is recognized, the company is also recognized. Companies are responsible for pushing their brands. Starbucks Company has successfully utilized and articulated this issue of branding in its outlets. Branding in Starbucks is a very important step. The company has managed to ensure that its presence is felt and recognized everywhere. Alongside the expansion policy, branding of the company has made the company develop and grow very rapidly.

The company logo, an image of a twin-tailed mermaid, is the major branding instrument for Starbucks. Since the company was incepted, it has seen its logo uplifted three times. The current logo is largely recognized all over the globe.  All the restaurants of Starbucks bear this logo. This is the sign that has catapulted this company into heights of recognition.

The insistence on quality in Starbucks has seen the company become a brand name in many different countries. The company forms trial restaurants for trying new products. For example, if the company wants to introduce new products into the market and it is being skeptical about the response that the public would give, it starts by creating stores and trying these products in those stores.  If the products are accepted, then the stores are rebranded into Starbucks and incorporated into the chains of stores owned by the company. The reasons why they follow this strategy is because they want to preserve the good image that the company has supported over the years.

Another way that the company is branding itself is by diverging into other areas. Some of these areas are music and entertainment. The company has established an entertainment division under the Hear Music brand. Other areas that the company has divulged into include marketing of books, music, and even film under the Starbucks brand.

Conclusion

From the above discussion, it has been observed that internal corporate communication is a very vital strategy for any company. The successful implementation of the internal corporate communication strategies has numerous benefits. For a company of the magnitude such as Starbucks, the strategies to be employed must be screened beforehand to understand the impacts that these ideas.

The way Starbucks has implemented these strategies have made the company achieve the global recognition that it has today. This recognition has been hand in with the massive expansion that the company has had over the few years it has been in operation. The sheer size of the company could present many management challenges. Some of these challenges could emerge from running the huge number of employees that the company has in its outlets all over the world.

As observed, the acceptance of internal corporate communications strategies in companies allow for a streamlined and smooth flow of communication between the employees of Starbucks and the management of the company. The company has successfully implemented these strategies to ensure that it stays on top of its game.

The main aim being to open up these channels of communication so that issues within the company can be easily resolved, the internal corporate communication is a vital part of the management concept. If well implemented, companies would find it easier to resolve these management problems that bring many companies down. The employees form a very important part of any company. As such, they should be given a chance to ensure that their views are listened to and the best ideas implemented.

In conclusion, the concept of internal corporate communication has been found to be an important one. Companies, which are willing to ensure that they take their management to another level, should consider employing the concept of internal corporate communication.