To what extent would unionization in Starbucks US help to develop the employee – employer relationship in Starbucks, US?

Starbucks is one of the major internationally acclaimed coffee shop chain which is especially known for serving high quality roasted Arabica coffee along with various other modifications and varieties. They run more than 1000 stores or “baristas” as they call it in US itself. However, post-pandemic, certain unrestful situation was observed in multiple outlets of this company related to sacking of employees without any appropriate reasons or justifications. This led to a common dispute amongst the labours and employers in multiple outlets. As a response to this, even a 3 day strike was held by the employees of 100 Starbucks outlets in US in the demand for formation of labour unions and have set uniform rules and regulations about employment and job security. This investigation aims to explore how the formation of a labour union would actually help in developing a better work culture and relationship among the employee and the employer.

• Survey report of 100 labors who participated in the strike - A survey will be conducted amongst 100 employees from different branches of Starbucks who participated in the strike to understand what are the major issues that has led to compelling circumstances which caused them to organize the strike.
• Interview report of a Starbucks employee - A personal interview will be done with one of the major activist Starbuck employee who played a significant role in organizing and implementing the strike.

• Article about the strike in guardian.com
• Commentary on the strike in pubs.org
• Commentary on the strike in http://www.nytimes.com

Organizational culture

There are four different types of organizational culture – market culture, adhocracy, hierarchy culture and clan culture. This investigation intends to introspect into the existing cultural practices in the organization and what changes in that is needed.

I would extend my heartfelt thanks and gratitude to the staff and all employees who has willingly participated in the survey. I would also thank my Business Management teacher, my IB Diploma Coordinator and my parents for their constant guidance and motivation.

Starbucks is one of the major internationally acclaimed business chains in the service industry that serves the entire nation of US with roasted Arabica coffee and other variations of the same along with some mouth- watering snacks and finger foods. As it is a big organization having branches sprawled almost across the globe, they follow multiple modes of organizational culture that plays a pivotal role in maintaining a healthy relationship between the employee and employees for a smooth functioning of the business and execute day to day operations without any major obstacles and obligations. The organization follows a mix of both line and functional management where a unity of command and unity of direction exists along with prevalent practices of hierarchy. Among all other major types of organizational culture that the company follows, adhocracy (authoritative bureaucracy) is the most prevalent one especially when it comes to the management of lower-level staff and workers.

During the post-pandemic period, the company faced a lot of challenging situations due to the unrestful feelings and situations amongst it’s employees. Since the inception, the company has been strongly against the formation of labor unions having their own justifications and logic to support that which mostly deals with increase in labor wages leading to a surge in the operational cost and thus negatively impacting the company’s gross and net profit margin. After the pandemic, the major issues faced by the workers were – a vast majority of employees losing their job without even having a proper notice or a satisfactory explanation behind sacking them, over loading employees with longer duty hours, putting responsibilities beyond specific job roles, unfair payment structures, irregular and unplanned schedule of work and many more As a result, the laborer become more rebellious and reached their verge of tolerance. In order to ensure job security and a healthy working environment, they started organizing strikes in demand of the formation of labor unions. The first strike was held on the Red Cup Day on November 17, 2022. The Red Cup Day is a major business making day in the history of Starbucks as on this day the company comes with some special offers and benefits in the form of Guerilla marketing to attract huge number of customers and make a huge turn over through immense sales. About 1000 Starbucks workers across 100 stores in US protested on this day by holding a strike and thus compelling certain outlets to remain closed and incur a major loss. This protest of the workers became even more dangerous when they held a 3 day strike from December-18, 2022 to December-20, 2022 in the demand of the recognition of a labor union. During this strike, Starbucks outlets across almost 100 cities in USA were non-functional and had a non-business day which brought down the sales of the company and caused them to witness a major economical loss. The demand of all these strikes was the formation of a labor union that will regulate and control the organizational culture, norms, authority and responsibility of the organization across US and across the globe too. This research investigation aims to explore that to what extent the formation of such labor unions may be found to be beneficial for the business of the organization.

The main findings from the survey with the employees and an active leader of the protest are noted as follows:

• A lot of employees are off late been asked to resign without even any proper justifications.
• The labors are frequently asked to work overtime and not even paid extra for that.
• The labors are not given any pandemic benefits even the ones mandated by the national Government.
• Labors are not allowed to maintain a friendly working environment and are always made to feel that they are shackled by certain rules and strict supervisions which are often derogatory.

The Force Field Analysis is a business decision making tool where the pros and cons of a particular decision to be taken is compared with each other and a score out of 5 is assigned to each of the factor. Following this, the scores against the decision and for the decision are summed and compared arithmetically to finally conclude whether that decision must be taken or not.

Total score in support of the decision

= 4 + 4 + 3 + 3 = 14

Total score against the decision

= 5 + 3 + 3 = 11

The analysis above shows that the decision must be in favor of allowing unionization at Starbucks with the main reasons being promoting better working conditions and security to the employees which would in turn lead to a better functioning and operation of the business and thus ensure better sales without any interruption.

However, here there are certain points that might question the validity of the conclusion we can arrive at from this tool. The assignment of scores to the factors has been done randomly and may also involve a bias towards the labors and their interests instead of considering the perspective of the employers and the business profits.

Pugh Matrix is an analytical decision-making tool that is used to take critical business decisions by comparing several alternatives against a set of standards and criteria. It is displayed in a tabular form where the column headings are the possible solutions and each rows mentions the standard or criteria that needs to be evaluated or compared. Three different signs are used to represent or record the responses against each criteria for each alternative solutions- a positive (+) sign indicating that the criteria are solved by that solution, a negative (-) sign indicating that the criteria is not solved by that solution and a zero (0) indicating that this criteria has no effect on this solution.

Considering the current situation, the three possible solutions are:

Solution - A

The company allows the process of unionization leading to the formation of a labor union which will have a major role to play in implementation or incorporation of any changes to the existing organizational culture and norms.

Solution - B

The company does not allow the process of unionization leading to the formation of a labor union which will have a major role to play in implementation or incorporation of any changes to the existing organizational culture and norms.

Solution - C

The company does not approve the process of unionization but brings about changes in their rules and culture to solve the issues that the labors are suffering from.

The matrix below will compare the three different solutions against the standards as described:

As the above matrix suggests, the Solution - A is the most favored one while the next best option is that the company themselves brings about certain changes to address the issues that is leading to labor unrest immediately and appropriately. However, Solution - C which is opposition of the labor union is not at all advisable and may even trigger more issues rather than making situations better.

The analysis above clearly shows that Starbucks opposing the unionization and not even taking any appropriate actions or policy changes to ensure job safety, security and a healthy working environment will trigger even more precarious situations. It will cause the labors to create more unrest and engage themselves into more such strikes which will eventually leads to a major loss in the business. The force field analysis shows that the decision to approve unionization and form a labor union must be favored. However, there is also a solution that provides a win-win situation both for the employees and the employers; the organization must bring about certain changes in their policy and norms to address the issues of the labor at the moment.

Currently, Starbucks mostly follow a hierarchy culture with a centralized model and line organizational structure. The orders, commands and instructions are set up only by the top-level management and mostly the sole proprietorship of the CEO which is passed down from a senior level to a lower level. The labors and workers at the lower levels have almost no control on the activity or functioning of the organization. This also limits and obligates them to communicate their views, opinions and grievances.

This altogether gives the labor to demand a platform on an official basis which can address their issues to ensure safety, economical security and psychological safety in their job leading to a smooth functioning business model and working model.

Instead of a typical hierarchical organizational culture, Starbucks can adopt a mix of clan culture and adhocracy culture where the labors feels like they are working as a family. The clan culture introduces more collaboration and open communication amongst the employees as that between the employee and the employer promoting team culture. The adhocracy model is also an effective organizational cultural form where all employees are given equal opportunities and rights to express their ideas and feelings whenever the company faces a challenge. This culture is more about breaking standardized norms and creating new ones that suits the situation and is solution oriented instead of offering authority to a particular individual or idea. For example, instead of terminating employees without any proper reason just to reduce operational expenses, the CEO could have discussed the issues with all their employees and then propose a model that serves the issues of both the employee security and benefits as well as the business revenues.

Question 1 - How long have you been working with Starbucks?

Question 2 - Are you receiving your wages and other benefits as promised?

Question 3 - Have you received the COVID benefits as per the national laws?

Question 4 - What are the major challenges that you are facing?

Question 5 - Why do you demand unionization?

Question 1 - How long have you been working with Starbucks?

Question 2 - What political agenda or propaganda do you have behind the strike you are currently organizing?

Question 3 - What are your main demands and expectations?

Question 4 - Was there any attempt to negotiate with the owner to address these issues?

Question 5 - Are there any other ways to combat the situation apart from having a strike?

US Starbucks workers to begin three - day strike in push for unionizing

More than 1,000 baristas at 100 stores are planning to walk out to show support for unionizing, an effort that Starbucks opposes