Howard schultz Organisational Behaviour analysis of personality, leadership, team management, motivation

1. 1. Introduction
1.1 The aims of the report
The aim of the report is the study and discussion of “an individual behavior from OB
perspectives”. So, it will deal with Howard Schultz in the role of a chosen business person. His
personality, values, attitudes and perception will be discussed in the body part. Besides, the
way of how his leadership, motivational and conflict management skills influence Starbucks will
be analyzed there.
1.2 Howard Schultz’s executive biography
Howard Schultz (born on July 19, 1953 in Brooklyn, New York) is a famous American
businessman, self-made person, mostly known as the chairman and CEO of Starbucks
Corporation, chain of international coffeehouse shops. He was raised in a poor family but
managed to receive an athletic scholarship to Northern Michigan University. After graduating
and working at numerous jobs, he became a general manager for Hammarplast drip coffee
maker manufacturer in 1979. His passion for coffee influenced his decision to become the
Director of Marketing in Starbucks Coffee Company in 1982. In 1985 he resigned and opened
his own coffee shop, and after the purchase of Starbucks he decided to create a chain of coffee
shops named Starbucks. His further aggressive expansion was very successful, due to high-
quality of product and service, together with wise management and leadership. Nowadays,
Starbucks Corporation is an international coffee and coffeehouse chain with 16,635 stores in 49
countries, as Starbucks Co (2008) says. Schultz is one of the wealthiest American
businesspersons and a prominent philanthropist.
1.3 The research method and limitations.
The large amount of interviews and articles were used and analyzed, including different
videos featuring Schultz’s public interviews and speeches. However, there was not any face-to-
face or direct interaction (i.e. interviews, questionnaires). Instead, the thoughts and memories of
other researchers, writers and eyewitnesses were used to assure the diversification of research
methods.

2. 2. Howard Schultz’s as an object of research (body part)
2.1 Personality
The first step of making the research on a particular person is defining and explaining
his/her personality. From the variety of definitions, two of them are appropriate for the subject of
the research, according to them personality is “totality of qualities and traits, as of character or
behavior, that are peculiar to a specific person” or “the pattern of collective character,
behavioral, temperamental, emotional, and mental traits of a person” (Asnwers.com, 2010). Of
course, every personality is unique and may be examined only to a certain degree. But, the
great range of tests, indicators and theories are used to describe a personality and predict
person’s behavior, such as The Big Five model, or Jung’s theory. For example, Myers-Briggs
Type Indicator forms sixteen psychological types using eight distinctive traits, from extraversion
and introversion to judgment and perception. As Hirsh (2006) suggests, Howard Schultz is
ENFP (Extraverted Intuition with Introverted Feeling), or so called “Idealist”. She says that
ENFPs are always warm, sensitive; they can inspire the whole team. On the other hand,
sometimes Schultz as a leader can overestimate the abilities of their team and he lacks of
suspiciousness and Machiavellianism, as he confessed in his interview with Ipek Cem in 2005.
But, his sensitiveness and patience does not mean low self-esteem, because his famous quote
is “You need the self-esteem to hire people who are smarter than you and give them the
autonomy to manage their own areas”. Another theory that tries to explain personality is Freuds
Psychodynamic Theory, according to which, many traits and motivational factors are
unconscious; they are often derived from childhood experience, as depression-guide.com
(2005) says. In fact, Schultz said in the interview with Laurie Underwood that his childhood can
be considered as the root of his personality and ideals. “I watched my father lose his self
esteem … he was kind of devalued. And I never forgot that. And so what we’ve tried to do as a
company is directly linked to my childhood experience”, he says. To add, locus of control is an
important aspect of personality research. Neill (2006) defines it as an individual's perception
about the underlying main causes of events in his/her life. Schultz evidently has an internal
locus of control, so he believes that his destiny is formed by his personal decisions and efforts.
‘I always wanted to be in charge of my own destiny… Enough is never enough.’ Carmichael
(2009) quotes him. Schultz appreciates both thoroughness and smart risk-taking: “Care more
than others think wise. Risk more than others think safe”, he says about risk-taking in his book
“Pour Your Heart into it: How Starbucks Built a Company One Cup at a Time”.
2.2 Values, attitudes and perception
The study of person’s values, attitudes and perception towards different issues is one of the
main aspects of understanding person’s behavior. According to selfgrowth.com (2009), value is
a concept that describes the beliefs of an individual or culture. In other words, values are basic

3. notions about what is right and wrong. In Schultz’s interview with Entrepreneur he praises such
instrumental values as responsibility and self-control that helped him to be a successful
entrepreneur, in addition to his passion with his job and dropping family/love problems. “You
have to have a great tolerance for pain! You have to work so hard … that most other things in
your life have to be sacrificed”, he says. On the other hand, an attitude is “inclination or a
tendency to respond positively or negatively towards a certain idea, object, person, or situation”,
as BusinessDictionary(2010a) suggests. It influences stimuli, or “individual's choice of action,
and responses to challenges, incentives, and rewards”. Attitudes are changed by the
experience, that’s why they differ from personality, as Ajzen (2005) clarifies. He also offers
cognitive dissonance and balance theory for the complete analysis of individual motivation and
behavior. In addition, the study of person’s attitudes is related to study of his/her personality to a
certain degree. For example, Ajzen (2005) claims that attitudes are related to Jung’s
physiological types, along with extraversion-introversion and judging-perceiving indexes if MBTI.
“The process by which people translate sensory impressions into a coherent and unified view of
the world around them” is called perception, as BusinessDictionary(2010b) defines. It also
influences the human behavior, along with all the previous factors. For example, Schultz’s
attitudes and perception to franchising as a phenomenon lead to the denial of using this model
of growth, despite of all the positive outcomes. Schultz will not ever admit that Starbucks will
become such a company, as he said in interview with Ryssdal.
2.3 Motivation
Howard Schultz’s behavior, persistence and priorities are heavily influenced by his
motivation. But, the way of how Schultz as CEO and leader motivates employees is more
important for this report, because it helps to understand and study many motivation theories.
Evidently, high-quality of service is essential for food industry, and Schultz believes that quality
of service and client’s satisfaction with service directly depends on employee’s satisfaction with
work. “It’s ironic that retailers and restaurants live or die on customer service, yet their
employees have some of the lowest pay and worst benefits of any industry”, he notes it in the
interview with Scott S. Smith.
Howard Schultz’s actions show that he is acquainted with content/need theories of motivation,
such as Maslow’s and Alderfer’s need hierarchy models, Herzberg’s two-factor theory and
McClelland’s achievement motivation theory. For example, high salary means satisfaction of
physiological/existence or hygiene factors, health insurance and stock options offered to all
employees satisfy the needs related to the safety. Besides, Schultz pays attention to the high
levels needs, including relatedness, esteem and self-actualization, or motivators factors. He
notes the importance of good climate in organization: “we rebuild that trust by providing an
environment that shows them we value their input”, he says. In addition, the decision to have a

4. comprehensive health insurance for all the employees, even for part-timers, was very innovative
for the industry and motivates employees in several ways. For instance, this innovation
obviously motivates from the point of view of Maslow’s and Alderfer’s theories because
employees, even part-time, feel more confident and safe about their health. Also, this also gives
sense of belonging to the only company that cares about its employees to such a degree and
they see that they are treated with respect.
But, employees sometimes are not motivated only by proper conditions and satisfaction of
needs. Sometimes rewards are more important. For example, according to expectancy theory of
motivation, people are influenced by the possible and expected results of their actions. Vroom
was the first and most prominent advocate of this theory, and he suggested that motivational
force can be measured via the equation M=V*X, where V is valence of the possible outcomes of
actions and E is the portability that actions will lead to some rewards. Indeed, Schultz in his
interview with Entrepreneur magazine says that the results of the decision to give stock options
to everyone in the company “increased productivity and commitment to the business on the part
of our partners [he calls employees in that way]”. The efforts of Starbucks management from the
point of equity theory are also impressive because hard work, skills and other inputs will really
lead to outcomes, such as job security, benefits, rewards, etc, as Moore (2006) summarizes.
Besides this, employees and managers are provided with certain goals, for instance, the
famous Starbucks mission statement is the goal for all employees, which is “to inspire and
nurture the human spirit – one person, one cup and one neighborhood at a time”. Because all of
these Starbucks was one of the “The 100 Best Companies to Work For”, according to
FORTUNE magazine in the period of 1998–2000 and 2002–2009, Starbucks Co (2008) says.
2.4 Leadership
Interestingly, Schultz tends to show the characteristics of democratic, laissez-faire and
paternalistic leadership styles simultaneously. He encourages employees (or “partners”) to
participate actively in decision-making process. In addition, he is considered to be persuasive
democratic leader, as he often persuades his employees in current hard time. He also cares
about his employees and called them “family”. On the other hand, laissez-faire signs are also
significant: "Howard Schultz's leadership style makes employees feel like partners, not hourly
workers," Meyers (2005a) quotes Ashley Woodruff, an analyst at Bear Stearns who follows
Starbucks. And it's a distinctive leadership style based on an idealism that seems at odds with a
sharp-edged global economy that has bloodied business credibility and employee morale, he
says. "The art of leadership is making sure we don't allow the scale and size of the company to
change the methodology of how we conduct ourselves," says Schultz. Amy, employee of
Starbucks shared her experience and idea of organizational structure at yahoo.answers: “They
focus on equality, we are a very horizontal based company...We have the positions of power,
but theoretically, each store should communicate equally with all of the baristas [part-time

5. workers]. There is a portal which the "big time bosses" communicate with us through. Every
store has one on the computer in the back; they tell us where we are going as a company and
our goals for the future.”
2.5 Conflict management
The management process of such a big organization means managing numerous conflicts
that arises permanently. Van Slyke (1999) defines conflict in organization as “competition
between interdependent parties who perceive that they have incompatible needs, goals,
desires, or ideas”. Conflicts in organizations may lead to stresses, irresponsible behavior and
low productivity. But, conflict is not always a negative phenomenon. It is a good way of problem
solving, innovating and creating understanding between workers, if there is an appropriate
conflict management. There are three main approaches to conflict management, according to
Bnet Dictionary (2010). First is that conflict is negative phenomenon and should be avoided,
second is that conflicts unavoidable, so they should be managed. Shultz is a proponent of the
third view, according to which conflicts are necessary for the survival and development of
organization, so creative conflicts and debates should be provoked. "If there's no tension, I don't
think you get the best result", Schultz says. He wants to build a team where employees “won't
be reprimanded for constructive criticism and conflicts, and where they are rewarded for
initiative”. “Also, you don't want ‘yes men.’ We look for people who aren't afraid of creative
conflict and debate over things that matter but who also respect the culture of the company”,
Carmichael (2010) quotes him.
3. Conclusion
To sum up, the behavior of Howard Schultz, his motivation, leadership and management
skills, accompanied by his persistence and incredible passion for his work helped him to create
Starbucks from the very beginning and make it one of the most successful food industry
companies. Nowadays, Howard Schultz is considered as a role model for many
businesspersons and start-uppers.

6. Appendix A
Howard Schultz photos:
Appendix B
Here are the interviews that were linked in the body
part:
Transcript of the Interview with Kai Russdal:
http://marketplace.publicradio.org/segments/corneroffice/corner_schultz_transcript.html
Interview with Ipek Cem:
http://www.global-leaders.tv/en/archive/howard_schultz.asp
Interview with Laurie Underwood:
http://www.ceibs.edu/link/latest/24310_10.shtml

7. Interview with Entrepreneur:
http://www.entrepreneur.com/growyourbusiness/radicalsandvisionaries/article197692.html
(in pdf: http://www.ceibs.edu/link_c/latest/images/20080107/8368.pdf )
Interview with Scott S. Smith. -
http://findarticles.com/p/articles/mi_m0DTI/is_n5_v26/ai_20923860/
Appendix C
http://www.youtube.com/watch?v=hwNDF54Jwbg – Schultz’s thoughts about the future of
Starbucks
http://www.youtube.com/watch?v=vm8GWdpMQUE - the role of persistence in winning.
http://www.youtube.com/watch?v=_kAiEO6jP48 - Howard Schultz in conversation with Dean
Judy D. Olian Visit UCLA Anderson School of Management

8. Bibliography
Ajzen, I., 2005. Attitudes, Personality and Behavior . 2nd ed. US: Open University Press.
Amy, 2009. I need to know about the leadership style of Starbucks? Anyone work there?
[online]. Available: http://answers.yahoo.com/question/index?qid=20090301181612AA7z0hO .
Last accessed 15 March 2010.
Bnet Dictionary., 2010. Conflict Management. [online]. Available:
http://dictionary.bnet.com/definition/conflict+management.html . Last accessed 11 March 2010.
BusinessDictionary., 2010. Attitude definition. [online] Available:
http://www.businessdictionary.com/definition/attitude.html . Last accessed 11 March 2010.

9. BusinessDictionary., 2010. Perception definition. [online] Available:
http://www.businessdictionary.com/definition/perception.html . Last accessed 17 March 2010.
Carmichael, E., 2009. Howard Schultz Quotes. [online] Available:
http://www.evancarmichael.com/Famous-Entrepreneurs/643/Howard-Schultz-Quotes.html . Last
accessed 25 March 2010.
Enterpreneur., 2010. Howard Schultz. [online] Available:
http://www.entrepreneur.com/growyourbusiness/radicalsandvisionaries/article197692.html . Last
accessed 23 March 2010.
Hirsh, S., 2006. Soultypes. Matching Your Personality and Spiritual Path. Augsburg:
AUGSBURG BOOKS.
Meyers, W., 2005. Conscience In A Cup Of Coffee. Part 1. [online] Available:
http://www.usnews.com/usnews/news/articles/051031/31schultz.htm . Last accessed 17 March
2010
Meyers, W., 2005. Conscience In A Cup Of Coffee. Part 2. [online] Available:
http://www.usnews.com/usnews/news/articles/051031/31s_2chultz.htm . Last accessed 17
March 2010
Moore, J., 2006. Tribal Knowledge: Business Wisdom Brewed from the Grounds of Starbucks
Corporate Culture . London: Kaplan Business .
Neill, J., 2006. What is Locus of Control?. [online]Available:
http://wilderdom.com/psychology/loc/LocusOfControlWhatIs.html . Last accessed 17 March
2010.

10. Schultz, H., 1999. Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time .
New York: Hyperion.
Selfgrowth.com., 2009. Definition: Personal Values . [online] Available:
http://www.selfgrowth.com/articles/Definition_Personal_Values.html . Last accessed 17 March
2010.
Starbucks., 2008. Starbucks FactsSheet. [internet] Available:
http://www.starbucks.com/aboutus/Company_Factsheet.pdf . Last accessed 7 March 2010.
Van Slyke, E., 1999. Listening to Conflict: Finding Constructive Solutions to Workplace
Disputes. New York: AMACOM.

11. Part 2
Organizational culture is the sum total of an organization's assumptions, experiences,
philosophy, and values that hold it together, that result in specific performance and way of
working in the company. Organizational culture can be described using the range of the
theories, but in this photo essay organizational culture will be analyzed in terms of sociability
and solidarity. Solidarity means that the people in the organization have the common goals and
they are very goal-oriented. Sociability means that the people communicate heavily in the group
and they are concerned about each other. However, it should be noted that low level of
sociability or solidarity does not mean that the culture in organization is bad, because different
organizations require different organizational cultures.
Here, in my photo essay, I will show various organizational cultures using the following photos.
The first photo shows us an example of mercenary organization. Two employees have
dissimilar background, values and attitudes. The relationships between them are rather cold,
but respectful. Although, they have common goal, which is providing high-quality logistical
services, they are very focused on it. Moreover, the management of the firm is satisfied with
such culture, they also promote competition between the employees. The possible drawback of
this culture is cold and inhuman environment in the firm.

12. On the second photo two managers of different that are waiting for the possibility to talk to the
director of the company. Each of them is trying to persuade the boss that the increase of
financing of his division (internal and external) will lead to the increase of company’s profits.
They know that the increase of the financing one of the division will lead to increased rewards
and benefits for the manager of the division. So, their goals motives are contradict each other.
Besides, they have hostility toward each other because of these reasons. That’s why, if we cast
away the analysis of the culture in their divisions and in the company in whole, it can be seen
that there is a fragmented culture on this particular photo.

13. On the third photo there is a mix of networked and mercenary organizational culture. The
service department (in the middle) has even changed the furniture placing so that they can
easily communicate and interact. But, the accounting department (to the left) is very focused on
their work and are not willing to interact.

14. The young and enthusiastic friends and co-founders of small IT-company represent the
communal organizational structure. On the one hand, they can work on the project the whole
day with the enthusiasm and fervor. On the other hand, the may fool about after the
accomplishment of their “mission”. But, there are some obvious weaknesses of this culture that
can arise in the future. If there will be a development and expansion of the firm, the initial
inspiration may fade, the friendship may cease or one of them can develop his skills and
consequently he will not put up with the low performance of the second one.
To conclude, almost every organization has a mix of organizational cultures, or organizations
just tend to a particular type of culture. However, the study of organization’s culture is a useful
tool for determining its strength and weakness.