Starbucks in UAE and Alshaya Group
Discuss about the Managing People and Organizations in Contexts.
Starbucks Corporation is an American organization which operates in the production of coffee and products based on coffee. The company was established in the year 1971 in Seattle, Washington. Starbucks has more than 26,000 stores in various locations all over the world. The organization is considered to be a representative of the concept based on “second wave coffee”. Starbucks has distinguished itself from the other coffee serving organizations that are present in the industry. The main factors that are related to the differentiation of the products of Starbucks from the other organizations are, quality, taste and the preferences of the consumers. The company has popularised darkly roasted coffee from the year 2000 (Starbucks Coffee Company. 2018). The organization is also known in the industry for providing high quality customer experience with the help of its stores that are designed in a unique manner. Starbucks has aimed at producing the best quality coffee to the customers which include, the dark roasted and light roasted types.
The report will be based on the operating style of Starbucks in UAE. The decision making process and negotiation process of Starbucks in the country will be analysed in the report in detail. Starbucks has partnered with the Alshaya Group for the purpose of entering the market of UAE. The group has been a pioneering force in retail franchise sector of the UAE. Alshaya has managed the franchises of many other retail stores which belong to various sectors. The organization thereby provides a multi-market and multi-brand franchise portfolio for to the local and the international customers in the country (Alvesson and Sveningsson 2015). Alshaya is committed towards delivering the new retail based platforms and the new brands which is a part of their commitment towards the customers who are loyal to their stores. Starbucks has entered the Middle Eastern and the North African countries with the help of the Alshaya Group. The Group helps in the operations of Starbucks in countries like, Egypt, Bahrain, Jordan, Lebanon, Kuwait, Oman, Morocco, Qatar, Oman, Saudi Arabia, United Arab Emirates and Turkey (Alshaya.com. 2018).
Starbucks provides an experience to the customers with the help of its cup of coffee. The company has aimed to be different from the beginning of its operations in the various parts of the world. The organization thereby aims at developing a community that is able provide the rich experience of coffee to the customers. The stores have provided a space to the customers which is comfortable in nature and acts as an experience for them. Starbucks is able to deliver the same level of experience to the customers at the stores in various parts of the world. However, the management style that is followed by Starbucks has been different in the operations of the organization in the Middle East (Bedford 2015). The organization operates its own stores in the other areas of its operations, whereas, in the Middle East the company operates with the help of the franchise model. The decision making process that has been implemented by the managers in the United States is different as compared to the decision making and negotiation process that is used by the company in the areas of UAE.
Starbucks: Providing Customer Experience
The managerial styles and the decision making process that is followed by the companies in the different countries are not similar. The managers need to take decisions related to the different organizational processes according to the ways by which the citizens of the country can react to the steps that are taken by the managers. The two countries can be analysed with the help of the Hofstede’s cultural dimensions which can help in understanding the ways by which the people of that country can react to various situations (Binder 2016)
. The culture that is followed in the two different countries can help in understanding the process by which the managers need to change their ways of managing different operations. The six major dimensions that are related to the cultural analysis of the countries are as follows,
Power distance – The first dimension is related to the fact that the individuals in the different societies are not equal. It helps in understanding the attitude that the culture of the country has towards the inequalities between the citizens. The power distance can thereby be defined as an extent up to which the members who are less powerful in the organizations in a country accept the unequal distribution of power. United Arab Emirates has scored quite high in this dimension, which is 90. This score depicts that the people in the country accept the unequal process of power distribution (Bratianu 2015). The hierarchy of the organization thereby reflects hierarchy in the various stages and the employees have also accepted the situation and process that is followed. The subordinates expect that the tasks they need to perform should be dictated. The employees are expected to be told what they need to do and the autocratic type of boss is most relevant in this case.
On the other hand, the power distance score of the United States is low. The country has scored 40 in this dimension. This score depicts that the people in the US are not tolerant towards the unequal distribution of the power within the organizations of the country. The attitude of the people towards the distance of power between the managers and the subordinates is different as compared to that of UAE (Cao et al. 2015).
Individualism – The second dimension that has been described by Hofstede is related to the interdependence level between the members of the society. This is related to the process of the ways by which the members define their status in the society as I or We. In the individualist societies the members are expected to take care of themselves and their family. In case of the collectivist societies the people mainly operate by forming groups and the members are responsible of taking care of each other. The members are also loyal to each other in this case. The score of United Arab Emirates in this dimension is 25 which quite low. This score depicts that the society of the country is collectivist in nature (Chua, Roth and Lemoine 2015). The members have a close relationship between each other and are stay as an extended family. The society thereby helps in the formation of long-term relationships and the members are also loyal to each other.
Decision-Making Process and Negotiation Style in UAE
On the other hand, the individualist score of the US in this dimension is 91 which is quite high. This score depicts that the culture that is followed by the members of the US society are individualist in nature and the concept of justice for all is followed in the country and by the US citizens as well. The hierarchical levels are established according to the convenience of the customers and the superiors or managers. The managers are highly dependent on the individual employees and teams for the purpose of gaining their expertise in various areas and operations of the company (Clegg, Kornberger and Pitsis 2015). The communication process that is followed by the individuals is informal in nature and the society is loosely-knit. The degree of geographical mobility is also quite high in the organizations. The members of the American society are able to conduct business operations with people whom they do not know at all.
Masculinity – The third dimension is related to the levels of the competition, success and achievement which indicates the behaviour of the members of the society. The high score in this dimension is related to the ways by which the members are driven by the high levels of competition. The society in this case is known as masculine in nature. The low score in this dimension is based on the care that the members of the society can take of the values and the quality life. In this case the society is known as a feminine society. The score that has been received by United Arab Emirates is 50 which depicts that the country cannot be termed as a feminine or a masculine society specifically (Deresky 2017).
On the other hand, the score that has been obtained by the United States in this 62, which us considered to be quite high. The US society can be therefore termed as a masculine society. The masculine drive of the culture is shown by the individuals of the society. Values also hold a certain level of importance in the US society. The people of the country have always shown a “can do” attitude which has been a motivator in the society of the US.
Uncertainty avoidance – The fourth dimension is based on the uncertainty avoidance tendency of the members of the society. This is related to the ways by which the members deal with the unknown future and the anxiety levels. The extent up to which the members of the culture are threatened by the issues that can occur in the future are a part of this dimension. The society of United Arab Emirates scores as high as 80 in this dimension which depicts that the members have high preference levels for avoiding the uncertainty (Hickman and Silva 2018). The country which scores high in this dimension is known to maintain rigid codes of behaviour and belief and they are intolerant towards any type of unorthodox kind of behaviour from the members of the society of an organization (Vance and Paik 2014).
Hofstede’s Cultural Dimensions
On the other hand, the US society has a low score of 46 in this dimension which depicts that the country is quite weak in this dimension. The Americans are always ready to accept new ideas and beliefs and the members are willing to try something new. The organizations in the country are also dependent on the high levels of innovation among the employees who are employed by them. Americans are much more tolerant towards the opinions and ideas that can allow them the freedom of expression (Kramer 2014).
Long term orientation – The fifth dimension is based on the ways by which the society is able to maintain links with the past and the challenges that are faced by them in the present and the future. The normative societies receive a low score in this dimension and the members prefer to maintain the traditions and the norms that have been set previously. The countries which have a culture which is followed by the members of the society receive high scores in this dimension. The society of the United States has proved to be normative in nature and has scored 26. The Americans are thereby more prone towards analysing the new information so that the truth of the same can be checked. The citizens of the country are practical in nature and they have a “can do” mentality (Lee, Scandura and Sharif 2014).
Indulgence – The sixth and last dimension is based on the challenge that is faced by the members of the society regarding the ways that are implemented by them to control their impulses and desires. The low scores in this dimension depicts that the members are not able to control their desires in an effective manner. The society of United States has received a high score of 68 in this dimension which depicts that the culture is indulgent in nature (Luthans and Doh 2018).
The analysis of the cultures of the two countries namely, United Arab Emirates and the United States has depicted that the style of the living of the citizens and the ways that are followed by them are different. The various types of ways that are used by the people belonging to the cultures affect the ways by which the business organizations continue their operations. The managers thereby need to use different methods of negotiating with the employees and the decision making process also needs to be different (Mendenhall et al. 2017).
Conclusion
The culture that is followed by the citizens of United Arab Emirates is based on the distance that exists between the power of the managers and the subordinates. The Emirati culture is followed by the members of the society of the country. The power in the organizations is distributed in an unequal manner and bureaucratic culture is followed by the employees. The employees expect that they will be instructed by the managers regarding the various work processes. The culture that is followed by Starbucks in the United States is mainly based on diversity and inclusion. The company has created many different partner networks that are mainly used for the purpose of enhancing the diverse culture within the organization. The culture that is followed in an organization is a major part of its operations (Mills 2017).
The culture of Starbucks is mainly observed in the cafes of the organization all over the world. The friendly and warm experience that is present in the cafes is a major part of the culture of the company. The culture that is followed in the cafes of Starbucks all over the world are similar. However, the management style and decision making based process of the company varies in the different countries. The negotiation process that was used by the managers in the US is different from the process which is used in the Middle East operations of the company (Moran, Abramson and Moran 2014). The culture that is followed by the citizens of UAE is different from the type of culture that is followed in the US. The hierarchical levels are present in the organizations in UAE and the employees except to be instructed about the various work processes that they need to go through. The distance between the managers and the subordinates is quite high in the organizations. The power in the organizations is distributed in the organization in an unequal manner. This leads to the decisions directly being taken by the managers of the company and the employees need to follow the same (Muenjohn and Armstrong 2015).
In case of Starbucks, which considered to be an employee centric organization, the managers have changes their process of communication in UAE. In this case the managers face the win-win situation in the process of negotiation as the employees follow the directions that are provided by the managers without any kind of persuasion. The power distance between them leads to the immediate action and the employees feel that they are bound to follow the instructions (Stahl and Tung 2015). On the other hand, in case of the operations of Starbucks in the United States the managers may need to face a situation where the employees may not be willing to follow the directions that are provided by the managers. The less distance of power between the employees and the managers may cause the lack of compliance and the managers can face a win lose situation in this case (Pawlowski and Bick 2015).
The high scores of uncertainty avoidance in the society of UAE will lead to the lack of innovative ideas in the operations of Starbucks. The main reason being that the employees will thereby tend to provide hindrance in the changes that need to be implemented in the organization. This will result in the lack of innovative ideas and products in the organization. The managers thereby need to think a lot before implementing any changes in the processes and the products in the organization. The negotiation process related to the implementation of change is tough in the operations of the company in UAE. On the other hand, the people of the US society are more prone to changes that can occur in the organizational processes and the products that are offered to the customers (Samaha, Beck and Palmatier 2014).
The managers thereby are able to implement changes in the operations of Starbucks in USA easily as compared to UAE. The society of UAE is highly collectivist in nature and this is a major reason behind the extra effort that managers need to put for the purpose of convincing the employees regarding the changes that need to be implemented in organization. The operations of Starbucks in the country is thereby based on the collaboration with a group of UAE which helps them in understanding the customers in an effective manner. The organization is thereby able to operate in the environment in a profitable manner (Siebert and Martin 2016).
Starbucks has thereby not taken the risk to open its wholly owned stores in the country as the company is aware of the differences among the societies of USA and UAE. The company has chosen to operate in partnership with the Alshaya Group in the Middle East instead of entering the market all by itself. The Group operates many other organizations and Starbucks is a part of the various operations of the Group. The company thereby aims at providing the Starbucks experience to the customers based on their local culture and the customs that are followed by them. Therefore, it can be said that the company has been able to provide the best experience to the customers in both the countries in spite of the cultural differences. The managers have however taken extra efforts to manage the situation in the country and the employees as well (Smith 2014).
Conclusion
The report can be concluded by stating that the differences in the cultures of two counties can affect the operations of an organization which has its operations in these areas. The managers of the organizations thereby need to implement different strategies to operate in the different countries according to the culture that is followed in these countries. The two countries that have been analysed in the report are UAE and the United States. The analysis has shown that the managers of Starbucks need to implement different strategies in these two areas of its operations. However, the company has tried its best to provide the best experience to the customers of both the countries. The Starbucks experience has been kept constant in all the countries where the company operates.
References
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