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1. INTRODUCTION
1.1. NAME OF THE ORGANIZATION

Starbucks Coffee Malaysia Company was selected for the case analysis and assessment.
The company was selected because of its long history in the food and beverage sector, as
well as its business style. In the year 1998, the Starbucks Coffee Company expanded to
Malaysia (Starbucks Coffee a Case Study Free Essay Example, 2016). Starbucks Coffee
Company entered Malaysia and expanded and operated its company under the licensing
model. Starbucks Coffee Malaysia launched its first store at Kuala Lumpur's KL Plaza
Bintang on December 17, 1998.

Millions of people everywhere within the world walk into Starbucks on a usual for his or
her cup of coffee, but it's over the overpriced coffee that brings people in day after day to
the Starbucks stores across the earth. Starbucks offers an upbeat environment and friendly
and helpful staff to help customers in any question or problem they'll have with the coffee
or service. People buy Starbucks for what it represents and thus the status symbol that
comes in conjunction with it. Although various business models exist, the principles and
structure of Starbucks are an honest model to follow, because of its national and global
success (Roby, 2011).

1.2. PRODUCTS AND SERVICES

Starbucks Coffee Malaysia sells espresso and coffee beverages, non-espresso and coffee
beverages, coffee-related accessories and equipment, gift and merchandise, souvenirs,
pastries, and confessions, among other things (The Starbucks Story Our Partners, 2012).
Customers can buy fresh meals, lunch items, pastries, sandwiches, and ready-to-drink
beverages at Starbucks coffeehouses. Starbucks sells coffee machines and other coffee-
related items (Pride & Ferrell, 2011). The organization also licenses major Starbucks
brands to Pepsi-Cola and sells its specialty coffee trademarks through national foodservice
chains, supermarkets, and licensed retailers (Pride & Ferrell, 2011).

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1.3. TYPE OF INDUSTRY

Starbucks is a part of the industry known as "specialty eateries." This industry comprises
businesses that run a variety of limited-service restaurants that specialize in specialized
foods. This is a highly competitive and fragmented sector. According to Pride & Ferrell,
2011, the top 50 businesses in this category generate around 45 percent of total revenue.
In the specialty eateries industry, coffee and doughnut cafes generate 40% and 20% of
sales, respectively. Dunkin Donuts, Einstein Noah, Krispy Kreme Doughnuts, Tim
Hortons, and others are among the industry's major participants. McDonald's and Subway
are both related to this industry in some way.
The demand in this market is determined by demographics in the chosen region, consumer
income, and customer preferences. The threat of new entrants in the industry is low, yet
competition is considerable and the threat of substitutes is also high. Customers'
bargaining power is moderate, as is suppliers' bargaining power (Pride & Ferrell, 2011).

1.4. NUMBER OF EMPLOYEES

When you go into any Starbucks cafe, you'll be welcomed with warm and sincere grins
from baristas who give pleasantries and take your order. Starbucks, which first opened its
doors in Malaysia in 1998, now employs over 4,000 people across 300 locations in 58
cities (Izzati, 2019). Starbucks Malaysia was voted Best Employer in 2015 by Aon Hewitt
for its strong performance culture and employee engagement (Izzati, 2019).
Starbucks recognizes its partners on a regular basis to keep staff motivated. Employees
were identified as partners, according to Starbucks partner resources and compliance
director June Beh. “It's another space for us to explore developing opportunities,” she
added, noting that the move demonstrated Starbucks Malaysia's commitment to
incorporating varied experiences and opinions in order to foster a culture of
empowerment.

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2. COMPARISON BETWEEN THE FORMAL COMMUNICATION AND INFORMAL

COMMUNICATION THAT OCCUR IN STARBUCKS
2.1. FORMAL COMMUNICATION
2.1.1. Vertical Communication

Formal communication is the delivery of a message or information through an

organization's hierarchy network or job responsibility (Ahmad, 2020). Starbucks
aspired to be the "Third Place" between home and work, where people could
congregate, relax, and freely connect. Starbucks wanted its consumers to appreciate
not just the finished product but also the process of placing their orders.

The leadership of the "Third Place" believed that the capacity of shop staff to
engage consumers through two-way conversation was at the heart of the Starbucks
experience (Choi, 2011). Employees listen to the customers' voices and implement
their ideas in the operation since information does not travel in only one direction
from the leadership to the employees. Employees provide consumer input to
management and transform the stores into venues for local cultural activities.
Starbucks' interiors are beautiful, and the store bulletin board advertised numerous
chances for local musicians and vocalists.

Employees are critical in providing meaningful Starbucks cultural experiences to

customers. Starbucks focused on employee benefits in order to make this happen.
Starbucks' employee treatment was influenced by Howard Schultz's vision.
Starbucks viewed baristas as "partners" in the company and provided health
insurance to all partners, including part-time employees.

Vertical communication encompasses two forms of information flow: downward

and upward (Ahmad, 2020). It is a component of an organization's communication
system, according to Rue and Byars (2004). Managers commonly utilize this
channel of communication to communicate messages to subordinates or consumers.
Downward vertical communication starts with high management and moves down
through the management levels to middle management, lower/line management,
and employees.

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As for Starbucks, employee benefits help to improve upward communication.

Employees are motivated by perks, provide feedback upstream, and deliver
superior service to consumers. Starbucks' efforts to include employees in the
company's success were successful. As an example, the idea for the Frappuccino
comes from California shop managers (Choi, 2011). They tried out the notion of a
cold blended beverage with various components on customers. The firm overturned
its original denial and changed its mind after receiving consumer approval. Since
then, the Frappuccino has been an immediate smash, driving store sales and
establishing Starbucks as a profitable drink item. Seasonal items such as strawberry
and cream Frappuccino and gingerbread latte were also created by employees at
shops.

Open-book management and coaching can be effective ways for Starbucks'

efficient downward communication. Sharing the company's vision, financial
information, and perks with every employee, as well as mentoring and training
employees to achieve the company's goals, may improve organizational
communication and increase employee identification with the Starbucks mission
(Izzati, 2019).

Within an organization, formal and informal communication are frequently used

terms. Howard Schultz makes at least 30 to 40 store visits per week, giving partners
the opportunity to speak with the CEO (Starbucks Case Study Free Essay Example,
2016). Jim Donald also enjoys visiting the stores and roasting facilities while he is
out in the field. Starbucks uses formal, upward, and downward communication.

Despite these attempts, Starbucks Broadcast News, an internal video newsletter that
informs partners about business news and announcements, was developed. Another
example of formal, downward, upward, and lateral communication was an internal
communication audit, in which randomly selected partners were asked for
comments on how to improve communication in the firm.

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2.2. INFORMAL COMMUNICATION

There are various informal communication pathways in a company, according to Ahmad

(2020). The vast majority of this communication takes place outside of the line of
command. The grapevine refers to these unofficial communication conduits.

Starbucks, like any other firm, will have an informal communication system that is not
governed by a hierarchical structure. This is when workers converse with one another; this
is essential since it serves two goals in any organization: social contact and the creation of
more effective communication channels.

Informal teams, on the other hand, have no structure and do not specialize in a certain
specialty. In informal teams, there is no management or leader; all team members are equal.
When people get together and start engaging with one other for a long period, it is said that
they create an informal team.

The organizational structure is considered to be influenced by informal groupings. This

firm (Starbucks) has formed an informal team to guarantee that communication is
successful. Instead of using the different phases to get to those listed above, these groups
can be utilized to assist in the resolution of those issues. Starbucks, for example, employs
informal groups to handle issues that emerge inside the organization.

Informal teams are formed as a result of the operation of socio-psychological factors at

work, in which people acquire particular likings and dislike for one another for non-official
contacts (Ias., 2007). Members of the organization establish informal teams to improve
their social and psychological well-being. All members of the informal team are equal; yet,
some may demand greater power due to personal traits. As a result, authority is delegated.
People delegate authority to people who are most likely to satisfy members' requirements.
This is the process through which informal leaders develop in informal groupings. In
groups, such people have the most pleasant relationships. The communication in these
informal organizations is done through unofficial methods.

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3. ANALYSIS WHETHER NON-VERBAL COMMUNICATION TAKES PLACE IN

STARBUCKS

Nonverbal communication is a vital supplement to verbal communication, and it may

sometimes even change the meaning of verbal communication (Ahmad, 2020).

3.1. Kinesics

Kinesics is a kind of nonverbal communication in which body language and facial

expressions are used instead of words (Ahmad, 2020). A simple wave or grin on the face
of a client or staff at Starbucks indicates that they are pleased and in a good mood. Some
customers wear severe expressions on their cheeks or have their arms folded to indicate
that they are irritated or in a hurry. When staff shares the same expression, it indicates that
they are focused on the customer's order and are extremely busy but still attempting to be
efficient (Fox, 2012).

For consumers and workers, the same stance, motions, and expressions signify the same
thing. People who are working on their computers or completing schoolwork, on the other
hand, stare at their work as if they are concentrating or attempting to comprehend the task
or information at hand. Finally, rubbing one's head indicates exhaustion or a lack of
comprehension.

3.2. Paralanguage

Nonverbal communication involves tone, pitch, intonation level, loudness, and speech
patterns such as silence or halts in a person's voice, which can also be considered a type
of communication, according to Rue and Byars (2004).

Starbucks has a relaxed, natural, and pleasant tone of speech. This may be found in all of
Starbucks' marketing materials and is easily identifiable. Starbucks' tone of speech is
uniform throughout all social media channels, marketing, advertising, and the baristas' in-
store conversational manner. Starbucks is also recognized for its distinctive language used
to identify beverages and place orders. This jargon has enhanced the Starbucks coffee
culture experience and made it fashionable to speak in this manner.

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4. DISCUSSION ON THE FOUR (4) TYPES OF BARRIERS TO COMMUNICATION IN

STARBUCKS

Failure in managing well-structured communication within organization not only causing crisis
due to misunderstanding but also might affecting company’s income and profit. Therefore, it
is important to aware on types of communication barriers to order develop a successful
communication to find a better solution for each communication impediments.

4.1. Selective perception

This is the propensity to listen to and accept objects and information that are congruent
with our values, beliefs, and aspirations while dismissing or rejecting information that is
not (Ahmad, 2020).

In other words, the receiver only tends to perceived information they able to interpret
while ignore information that they do not able to articulate. This type of barrier could
happen among staff members and also between management and workers in organization.
For examples in Starbucks, the management giving out memo on new work rotation
implementation to raise workers’ motivation, however this memo was misinterpreted by
the workers perceive it as increase in their workload.

4.2. Disruption

Any element that disrupts, confuses, or limits communication is referred to as disruption

(Ahmad, 2020). Disruption can be caused by noisy environment, unstable telephone or
internet connectivity and other physical disturbance that causing confusion and failed in
conveying message. For examples, under Starbucks CEO, are the vice presidents followed
by the various managers who run the various outlets all around the world. Unexpected
disturbance such as line connectivity or perhaps natural disaster can cause difficulty to
update and provide feedback on their outlet their upper management.

4.3. Emotions

Emotion can cause barriers in communication by sending inappropriate emotional

condition message towards the receiver anger, sad, irritating or jealousy. Effective and
clear communication can only be achieved whenever the process of conveying message

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between sender and receiver were being ignored from any emotional distortions. For
examples, Starbucks manager giving instructions to one of their workers who just
receiving a bad news from his or her family. This worker might not have conveyed the
message effectively due to inappropriate emotion he or she had at that moment.

4.4. Communication skills

Communication skill may have derived from different background of particular person,
such as culture, educations or personality. Apart from that, usage of jargon, unfamiliar
language and accents also leads to barrier in effective communication. Examples, local
Starbucks outlet workers with limited understanding on other languages was been given a
training from overseas trainer on new Starbucks products. The training will not be efficient
due to lack of understanding and communication.

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5. METHODS TO INCREASE THE EFFECTIVENESS OF COMMUNICATION IN

STARBUCKS

Due to the risen barriers in communication, Starbucks can use few methods in order to increase
their effectiveness of communication to avoid unnecessary problem occur and re-occur and
maintaining well-being of their business products and services.

5.1. Controlling the flow in communication

In order to prevent miscommunication, Starbucks can use controlling the communication

flow by manager using a good system to communicate with outlet Starbucks workers (Fox,
2012). Apart from that, using the knowledge sharing information management program to
make the business information accessible to partners.

5.2. Encouraging feedback

Effective communication is two-way interaction, either top to bottom or bottom to top.

Starbucks can reduce the barrier in communication by encouraging feedback from the
outlet Starbucks workers to their headquarters through virtual technology to communicate
with partners worldwide. Medium such as constructive employee’s questionnaire, exit
interviews and whistle-blower hotline can help to encourage workers raise their updates
and any concern to the management (Tikson, 2018).

5.3. Language used

Management can give clear instructions by using understandable language and preferably
avoid jargon language. This can avoid misinterpretation and misconception in any
information conveyed. Formulate a multicultural team in order to connect with the
cultural and language partners. Hence, it is important for Starbucks to hire outlet manager
localized provided with have a high communication skill to be mediator between
Starbucks outlet workers and management.

5.4. Active listening and control negative emotion

Barriers of communication due to emotional distortion can be avoided through openness

and pay attention to their workers needs and feedback without prejudice. Some worker
finds it hard to convey and express their information due to fear for any irrelevant topics

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or sensitive issues. Due to Starbucks is a worldwide and multi cross racial companies, it
is important to be open and tolerate on others thought and opinion and respond towards
others message appropriately.

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6. SUMMARY

Internal corporate communication is a very important approach for every organization, as seen
by the discussion above. There are several advantages to successfully implementing an internal
business communication strategy. For a corporation of Starbucks' size, the methods to be used
must be vetted ahead of time to comprehend the implications of these concepts.

Starbucks' use of these techniques has helped the firm attain its current level of worldwide
renown. This notoriety goes hand in hand with the company's enormous expansion in the few
years it has been in existence. The company's sheer scale might pose several managerial
problems. Some of these issues may arise as a result of the company's large number of
employees at its many locations across the world.

The acceptance of internal corporate communications strategies in firms, as noted, allows for
a streamlined and seamless flow of information between Starbucks employees and the
company's management. These methods have been effectively adopted by the firm to guarantee
that it remains on top of its game.

Internal corporate communication is an important element of the management philosophy, with

the main goal of opening up these lines of communication so that difficulties inside the firm
may be readily handled. Firms would find it easy to overcome these management issues that
bring many companies down if they were effectively executed. Employees are an essential
component of every business.

Starbucks has succeeded as a result of its use of communication, as it has been able to counter
both internal and external threats to its business model. They should continue to interact with
their partners and consumers so that they are always aware of what they need to do to expand
and build more efficient and effective ways of satisfying their clients' needs. The organization
will be better positioned to deal with problems posed by competition and other concerns, such
as the changing economy, as a result of improved communication. As a result, people should
be given the opportunity to have their voices heard and the finest ideas adopted.

Finally, the notion of internal corporate communication has been discovered to be crucial.
Internal corporate communication is a notion that companies should consider using if they
want to take their management to the next level.

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REFERENCES

Ahmad, S. A. (2020). Principles of Management MANAGEMENT.

Choi, Y. D. (2011, February 1). Green Design Development: Effective communication of the
Starbucks I. https://yuschoi.blogspot.com/2011/02/effective-communication-of-
starbucks.html

Fox, J. (2012, July 13). Verbal/Nonverbal Communications In A Micro -Culture | Dunkin

Donughts Vs. Starbucks.
https://dunkinvsstarbs.wordpress.com/2012/07/15/verbalnonverbal-communications-in-a-
micro-culture/

Ias., R. N. (2007). Starbucks Corporation: Case Study in Motivation and Teamwork. 1(1), 1–12.
http://www.freeonlineresearchpapers.com/starbucks-case-study

Izzati, A. (2019, December 17). Workplace steeped in positivity | The Star.

https://www.thestar.com.my/metro/metro-news/2019/12/17/workplace-steeped-in-positivity

Pride, W. M., & Ferrell, O. C. (2011). Marketing. 805.

http://books.google.com.my/books?id=cOKMr4Fpqc0C

Roby, L. (2011). An Analysis of Starbucks as an International Business. Liberty University, 1(4),

3–24. https://digitalcommons.liberty.edu/cgi/viewcontent.cgi?article=1237&context=honors

Starbucks Case Study Free Essay Example. (2016, April 26). https://studymoose.com/starbucks-
case-study-essay

The Starbucks Story Our Partners. (2012). www.starbucks.com

Tikson, S. D. S. (2018). Human Resource Policies and Work Culture: A Case of Starbucks.
JBMI (Jurnal Bisnis, Manajemen, Dan Informatika), 15(1), 1–12.
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