7/13/24, 5:49 PM Principles Of Management Project On Starbucks

CBSE 12th Commerce CBSE Projects Principles Of Management

Principles Of Management Project

On Starbucks

Table of Contents

HENRI FAYOL
Life Time – 1841 – 1925

Profession – Mining Engineer & Mgt. Theorist (French)

Education – Educated from Mining Academy at St. Etienne in 1880.

Position Held – Founded the Mining Company ‘Compagnie De

Commentary – Fourchambeau – Decazville.’ and became its Managing
Director in 1888 and remained till 1918.

Contribution – Mainly 14 Principles, which were referred to as

administrative in that they have a Top-Down approach concerning Top
Mgt. And other managers conduct.

FATHER OF GENERAL MGT

Henri Fayol (1841 – 1925) was a French management theorist whose theories
concerning the scientific organization of labor were widely influential at the
beginning of the twentieth century. He was graduated from the mining

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academy of St. Etienne in 1860 in mining engineering. The 19-year-old

engineer started at the mining company. ‘Compagnie De Commentary –
Four Chambean – Decazeville,’ ultimately acting as its managing direction
from 1818 to 1918.

He wrote Administration Industrielle Et Generale. It was published in English

as General and Industrial Management in 1949 and is widely considered a
foundational work in classical management theory.

Principles of management advocated by Fayol are known as general

principles of management as these are applicable in all types of
organizations in all countries. In light of this, this project has been
undertaken to find out the extent to which Fayol’s principles are being
applied in Starbucks Corporation.

STARBUCKS

One of the most famous corporations in America is recognized worldwide by

its distinctive logo and the signature scent – coffee. Since the very first store
opened in Seattle, Starbucks has continued to grow and change, adapting to
become a better and more successful company.

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History
The first Starbucks store opened at Pike’s Place Market in downtown Seattle
in 1971 as a whole been coffee seller. By the beginning of the 1980’s it had
grown to S stores and included a roasting plant and a wholesale business
selling to local restaurants. At this time, the organization also had an
employee named Howard Schultz, who was the manager of retail sales and
marketing, saw huge growth potential in the coffee business, and open his
coffee shops in 1985 called “II Crionales’s.” After a rocky start throughout
the rest of the ’80s, Schultz took the company public in 1992. Schultz’s
company continued to grow, Starbucks maintains ownership of all its North
American retail stores.

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MISSION
The mission of the company is simply laid out according to the Starbucks

“To inspire and nurture the human spirit-one person, one cup, and one
neighborhood at a time.”

Environmental Mission: “Starbucks is committed to a role of

environmental leadership in all facets of our business.”

VISION
“Share great coffee with our friends and help make the world a little better.”
These ideas have allowed Starbucks to grow into its current incarnation: a
publicly traded, for-profit, international selling, a highly successful
corporation based in Seattle, Washington.

AUTHORITY AND RESPONSIBILITY

According to Fayol, authority is right to give orders and obtain obedience
and responsibility is a result of authority. The two types of authorities are:

1. Official Authority

2. Personal Authority

Authority is both formal and informal authority. Managers require authority

and commensurate with responsibility. There should be a balance between
authority and responsibility. An organization should build safeguards against
the abuse of managerial power. At the same time, the manager should have

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the necessary authority to punish the sub-ordinate for willfully not obeying a
litigate order, but only after sufficient opportunity has given to sub-ordinate.

Conclusion – We conclude that four employees have full authority, while two
employees do not have full authority.

UNITY OF COMMAND

According to Fayol, there should be only one boss for every individual
employee. If an employee gets orders from two superiors at the same time,
the principle of unity of command is violated. The principle states that each
participant in a formal organization should receive orders from only one
superior. If this principle is violated, then “Authority is undermined, a disciple
is jeopardy, order disturbed, and stability threatened.” Dual subordination
leads to confusion among subordinates, and they also get a chance to make
excuses.

Conclusion: – 3 employees report to only one boss while the other 3 have
different bosses.

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REMUNERATION TO EMPLOYEES

The overall pay and compensation should be fair to both employees and the
organization. The employees should be paid for at least providing them a
standard of living with their wages and should be in the paying capacity of
the company. Remuneration should be just and equitable. This will ensure
healthy relations among the workers and management.

Conclusion: 5 employees are satisfied with their remuneration while one is

unsatisfied.

SUBORDINATION OF INDIVIDUAL
INTEREST TO GENERAL INTEREST
The interest of an organization should take priority over the interest of any
one individual employee, according to Fayol. Every worker has some

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individual interest in working in a company. But the company has its

objectives.

Conclusion: 4 employees give top priorities to the organizational goal while

two employees give priority to their individual goal.

CENTRALISATION AND
DECENTRALISATION
The concentration of decision-making authority is called centralization,
whereas its dispersal among more than one person is known as
decentralization. The degree of centralization depends upon the
circumstances in which a company is working. Large companies have more
decentralization than small ones.

Conclusion: 3 employees are in favor of centralization, and the other three

employees are in favor of decentralization

EQUITY

Good sense and experience are needed to ensure fairness to all employees,
who should be treated as fairly as possible. The principle emphasis
kindliness and justice in the behavior of managers and towards workers. This
will ensure loyalty and devotion. There should be no discrimination against
anyone. Nowadays, in multi-national corporations, ’ people of various
nationalities work together in a discrimination-free environment.

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Conclusion: All six employees feel that there is equity in the organization.

INITIATIVE
Initiative means taking the first step with self-motivation. It is thinking out
and executing the plan. It is one of the traits of an intelligent person. The
initiative should be encouraged. But it does not mean going against the
established practices of a company for the sake of being different. A good
company should have an employee suggestion system.

Conclusion: 4 employees feel free to initiate their ideas, while two

employees are not of the same notion.

STABILITY OF PERSONNEL

“Employee turnover should be minimized to maintain organizational

efficiency,” According to Fayol. Personnel should be selected and appointed
after the due and rigorous procedure. But once selected, they should be
kept at their post for a minimum fixed tenure. They should be given time to
show results. Any aphorism will create instability among employees.

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Conclusion: We conclude that personnel is stable in Starbucks as four

employees have served for more than one year.

ORDER
According to Fayol, “People and materials must be in suitable places at the
appropriate time for maximum efficiency.” The principle of the order states
that ‘A place for everything in its place.’ Essentially it means orderliness. If
there are fixed places for everything and is present there, then there will be
no hindrance to the activity of the business. This will lead to increased
productivity and efficiency.

Conclusion: All six employees agree that follow proper order while working
in the Starbucks cafe.

DIVISION OF WORK

Work is divided into small tasks/jobs. A trained and competent specialist is

required to perform each job. Thus, the division of work leads to
Specialization. The division of work intends to produce more and better
work for the same effort. Specialization is the most efficient way to use
human effort. In business, work can be performed more efficiently if it is
divided into specialized tasks, each performed by a specialist or trained
employee.

Conclusion: 3 employees are in favor of the division of work.

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DISCIPLINE
Discipline is obedience to organizational rules and employment agreements,
which are necessary for the working of the organization. According to Fayol,
“Discipline requires good superiors at all levels, clear and fair agreements
and judicious application of penalties.” Discipline is applied when both
workers and management honor their commitments without any prejudice
towards one another.

Conclusion: We conclude that Starbucks follows disciplinary policy as most

of the employees agree that they have to maintain the code of conduct.

UNITY OF DIRECTION
All the units of an organization should be moving towards the same
direction and the same objectives through coordinated and focused efforts.
Each group of activities having the same objectives must have one head and
one plan. This ensures unity of action and coordination.

Conclusion: This principle is duly followed, as all employees follow the same
goals & direction of the workplace.

SCALAR CHAIN

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An organization consists of superiors and subordinates. The formal lines of

authority from highest to lowest ranks are known as a scalar chain.
According to Henri Fayol, “Organizations should have a chain of authority
and communication that runs from top to bottom and should be followed
by managers and subordinates.”

Conclusion: 4 employees cannot directly contact the highest authorities.

ESPIRIT DE CORPS
Management should promote a team spirit of unity and harmony among
employees. Management should promote teamwork, especially in large
organizations, because otherwise, objectives would be difficult to realize. It
will also result in a loss of coordination. A manager should replace ‘1’ with
‘We’ in all his conversations with workers to foster team spirit.

Conclusion: Team spirit is followed and accepted by most of the employees.

CONCLUSION
The primary purpose of this study was to obtain deep insight into the
principles of management given by Fayol. Implementing the principles of
management is one of the most important functions of a manager as these
are widely applicable to managerial problems and have cast a profound
impact on management thinking today.

Since going public in 1992, Starbucks Corporation has grown to become an

international retailer in more than 50 countries across the globe. According
to Google Finance, that $17.00 per share price trading at $40.00 today and
Schultz is showing a fiscal year total compensation of just over 24.8 million
dollars. The company boasts over 17,000 stores worldwide, with over
2,10,000 employees, encompassing not only their signature Starbucks
blends of coffee, but the corporation also markets Tazo brand tea, specialty
candies, and numerous kitchen supplies such as cups and coffee making as
well as other merchandise. They acquired Seattle Coffee Company in 2003,
making the “Seattle’s Best” Coffee Brand part of the Starbucks “family” of
coffees. This Brand has recent lyre-invented itself and is marketing its
updated blend of coffees, further adding to the constantly changing and
advancing market.

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In its 40-year history, the Starbucks brand has seen huge growth, becoming
a worldwide icon of highly caffeinated beverages, recognized from Sydney
to Tokyo, to London and back to its home of Seattle, Washington. With an
adaptive mindset and a Mission and Vision that drives the company to stay
number 1 in its industry, Starbucks Corporation will continue this trend and
stay at the leading edge in business.

CERTIFICATE
This is to certify that of Commerce of Guru Nanak International Public
School, Model Town, Ludhiana has completed his project file under my
supervision. He has taken proper care and shown the utmost sincerity in the
completion of this project.

I certify that this project is up to my expectations and as per the guidelines

issued by C.B.S.E.

Mrs. Mamta

(Dept. of Commerce)

GNIPS, Ludhiana

ACKNOWLEDGMENT
I am very thankful to my Business Studies Teacher, Mrs. Mamta, Who helped
me in analyzing the application of Principles of Management. She made my
concepts more clear, enhanced my knowledge, and help me realize the
importance of Principles of Management.

I am also thankful to the CBSE for giving me such an amazing opportunity of

doing this project and giving suitable instruction and guidelines for the
project.

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