Starbucks started out as a small coffee house in Seattle, Washington in 1971, established by three men who believed in good coffee. In 1981, they brought in Howard Shultz as director of marketing and retail stores (Wilma, 2004). Schultz had a vision that extended far beyond the roasting of coffee beans and purchased the company from the founders in 1987. Shultz succeeded and surpassed his vision by establishing a functional organizational structure that allowed for rapid growth of the company while maintaining his concept.
Starbucks' organizational structure is a traditional functional structure. A functional organizational structure is one in which the organization's guidelines are followed to the letter. They have definitive levels of authority for each level of management (Irani, 2013). Starbucks has a vertical flow, with all of the specific departments ultimately being accountable to the CEO, Howard Shultz. This structure has allowed the company to maintain the vision and direction of Shultz, by keeping each store consistent with his specific guidelines. The organizational chart for Starbucks clearly shows the chain of command. Schultz has 15 divisions that report directly to him. These include the CIO, Marketing, CFO, Legal Department, Supply Chain Operations, Human Resources, Public Affairs, Global Development, Americas, Starbucks Channel Development, China and Asia Pacific, EMEA, Global Coffee, Strategy, and International Operations. Under these are another nine divisions of upper management. These include regional departments for marketing, finance, coffee procurement, a digital officer, and CEOs specific to certain regions. These are Asia Pacific, France, China, and International Development. There are also general managers of licensed stores (The Official Board, 2015). .
The organizational functions of a company or corporation can dictate which organizational structure should be utilized.