Question

Starbucks study in Chapters 13, 14, and 15 of Management 210, 6th Edition. Please write 1 to 2 page!

Here are the key points of the chapter to be answered.

1) Starbucks' operant conditioning

2) Starbucks' Expectancy theory and equity theory

3) Starbucks' Teamwork benefits, and team performance problems

Answer 1

1. Starbucks implements operant conditioning to promotional program, My Starbucks Reward, offered to it's customers. My Starbucks Rewards is a loyalty program that provide customers exclusive rewards, which are definitely a positive reinforcement according to the theory. Customers can enjoy the rewards, which includes free drinks, exclusive early access to Starbucks’ newest products, and quick and easy payment with Starbucks’ mobile app, when they purchase coffee and join the program. These rewards provide a positive experience and strengthen the consumer behavior. Hence, customers are more likely to keep buying Starbucks’ products and become loyal customers. Starbucks uses a fixed-ratio reinforcement to increase the frequency of buying its products. When the customers buy products, ranging from coffee, pastry or tumbler, at a store, they will earn a Star. These stars then add up to earn exclusive Starbucks rewards. If customers collect 12 Stars, they can enjoy a free drink. The more stars they collect, the more rewards they can earn. Once they reach the certain number of Stars, they will reach Gold membership level and can enjoy more exclusive benefits such as New Year Gift. In this way, customers can be motivated to continue buying Starbucks’ product over and over again.

2. A. The equity theory states that equality in the reward system results in increased productivity as workers are motivated to work harder knowing that the reward will be based on the efforts they put in and not on any other basis like one’s position. Starbucks is known for its equal treatment of the employees. The workers refer to each other as partners and the managers’ co-work with their juniors in the same working environment and at times the less senior workers are put at the frontline.

This creates a good working environment as all workers feel equally appreciated. This motivates them thus ensuring increased productivity. Their enthusiasm translates into good customer service hence encouraging the customers to stick to the company.

B. The Expectancy Theory explains the behavioral process of why individuals choose one behavioral option over other. It also explains how they make decisions to achieve the end. Vroom introduces three variables within the expectancy theory - valence (V), expectancy (E) and instrumentality (I). These three elements are important behind choosing one element over another because they are clearly defined as effort-performance expectancy (E to P expectancy), performance-outcome expectancy (P to O expectancy).

Components of Expectancy theory are Expectancy, Instrumentality, and Valence. 1. Expectancy: Effort > Performance (E>P); 2. Instrumentality: Performance > Outcome (P>O); 3. Valence - V(R) Expectancy- Probability (E to P). Expectancy is the belief that effort (E) will result in attainment of desired performance (P) goals. Factors that are associated with the individual's Expectancy perception are self efficacy, goal difficulty, and control. Self efficacy is an Individuals belief about his ability to successfully perform a particular behavior.

Difficulty happens when goals are set too high or performance expectations that are made too difficult. This will most likely lead to low expectancy perceptions. Control is a perceived control over performance. In order for expectancy to be high, individuals should believe that they have some degree of control over the expected outcome. Starbucks had matched it's employees to the jobs based on their abilities and clearly communicating the tasks requires for the job is an important part of this process. This process takes place within the 25 hours of classroom training.

Instrumentality- Probability (P to O) Instrumentality is the belief that a person will receive a reward if the performance expectations are met. This reward can be in the form of a pay increase, promotion, recognition or sense of accomplishment. Starbucks offers various types of benefits package includes full medical and dental insurance coverage, disability and life insurance, vacation days, retirement saving plan with match company contributions, discounted stock purchase plans and stock options as a part of Starbuck’s BEAN STOCK Program.

Instrumentality is low when the reward is awarded for all performances given. Factors associated with the individual's valence for outcomes are namely trust, control and policies. If individuals trust their superiors, they are more likely to believe their superior's promises. When there is a lack of trust on leadership, people attempt to control the reward system. When individuals believe they have some kind of control over how, when, and why rewards are given out, Instrumentality tends to increase.

Formalized written policies majorly impact the individuals' instrumentality perceptions. Instrumentality is increased when formalized policies are associates rewards to performance. Valence- V(R) Valence: it is the value the individual places on the rewards based on the needs, goals, values and Sources of Motivation.

Starbucks distributes rewards that employees’ value. This action increases the expected value of outcomes resulting from the desired performance

3. In Starbucks the teamwork strategy is to build good relationship. It has a well developed system to Foster good relationships between managers and Employees. They use the title Partner regardless of the level of the employee. This narrows the gap of bureaucracy. Further they Co work in the first line to eliminate the distance between different statuses. Also the number of employees is between 3-6. Small size helps staff to know each other better. Suggestions and complaint of Employees are treated with equal importance. They also get the right to participate in the process of the revision of company policy. Thus each staff member thinks that they play an important role in operations of the company and are jointly working out the direction of Starbucks. The Employees thus gain a sense of respect and participation.

Team performance problems - A recent study has revealed the company's executives are out of sync with what's really going on in stores. Hence serious adjustments need to be made if the company wants to improve its team performance and also grow sales and maintain its positive, progressive reputation. Issues that need to be addressed are  fixing staffing issues, improving worker pay and bridging the disconnect between company and corporate workers.

Starbucks also continues to struggle in the stores, where with more expectation, they have less support staff. Starbucks leaves most decisions in the hands of store managers. Regional leaders did not see major issues last summer and haven't seen any need for changes beyond the regular course of business over the last year. Staffing problems have been more complicated by the number of jobs that employees are expected to perform. Employees are also expected to establish an emotional connect with customers. But this core tenant of Starbucks' philosophy is being increasingly undervalued. There is also the need to better support and compensate teams for their efforts.  Even with benefits beyond hourly pay, including college tuition assistance, 401(k) matching and the ability to purchase Starbucks stock through the Bean Stock program, Starbucks employees said these can help persuade them to stay at the company, but a higher pay would better serve employees. Many team members feel the company remains out of touch with the needs of its in-store workers. Hence, Starbucks may be growing sales,still frustration is increasing in many stores in a way that the executives have not addressed in a comprehensive manner.