Role of Operational Management in the Organisation


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Organization Selected : Starbucks


Management operation refers to the designing and controlling the process of manufacturing and redesigning operation of business operations in manufacturing of goods and services. This assist companies to produce goods effectively and efficiently with optimum cost. As it is concerned with the converting materials and labour into finished goods and services with proper efficiency. Operation management entails studying the use of raw materials and ensuring that minimum waste should occur at the time of production. To better understand this concept Starbucks UK Limited is being selected. The leaders and managers plays crucial role, so role of leader and function of manager is being explained in this report. There are different leadership approaches to operation management which is also explained in this present report. The operation management is very important for effective business operation, which is being explained in this project. There some external and internal business environment factors which affect the business decision so these factors are discussed in this report.


P1. Role of leader and function of manager


Leaders are those who lead a team in order to perform various task and get goals achieved. The leader plays an important role in the organisation as they influence and encourage their subordinates so that they can work in a manner. As main objective of leaders are to motivate their subordinates and employees and increase their efficiency and productivity in organisations.


Managers are the person in company who managers and design the work of organisation in order to achieve pre set goal of company. The managers develop strategies and policies for staff and employees so that they can work effectively. The managers are also obliged for performance appraisal of employees. As managers of Starbucks plays an important role in organisation for smooth functioning of company's operational activities. The managers have power to get work done by employees (Olhager and Johansson, 2012).

Difference between managers and leaders

Generally the role of managers and leaders are considered as identical but there is great difference between function which are performed by the managers and leaders in order to get work done by employees in company. The managers set the goals, vision and mission of organisation and leaders are supposed to communicate these goals to employees. The difference is discussed below:



Managers are obliged to determine goals and objectives of organisation

Leaders are supposed to pursue the goals which are developed by managers

Managers formulate the policies and then communicate it to leaders.

The leaders of organisation communicate regarding formulated policies to the employees. So that they work according to pre set policies.

Managers direct to the groups.

The leaders give direction to their team only.

The managers of Starbucks develop innovative and new idea for betterment of organisation.

As leaders are liable for implementing these ideas into reality.

As they focus on things only.

Leaders are mainly focus on people of their team and other subordinates.

Managers plan for organisation so that goals can be achieved easily.

The leaders mainly focus on inspiring the team members and other subordinates'

They give direction to leaders.

The leaders are supposed to motivate employees to work effectively and efficiently.

The Starbucks is a coffee retail chain which has it store across the world. The strategy which developed by organisation lead to enhance productivity which shows company is managing its operation efficiently. The managers of Starbucks determine standards for effective performance of employees and staff in company. As managers of company try to enhance interpersonal skills of employees so that goals can be achieved. The differentiated role of leaders and manager in company assist company to grow and earn maximum profits.

M1 Function of manager and role of leader in organisation

There various functions which are described as below:


This is an important function for Starbucks manager, as they are supposed to plan and set the goals of organisation which helps in increasing revenues. The role of leader is to communicate roles to employees which are set by mangers.


The managers of Starbucks obliged to plan and use resources of company in effective manner. As role of leader is to allocate these resources efficiently and encourage employees.


Managers of Starbucks direct the task which needs to be performed by employee and staff whereas role of leader is to create an effective team.


Staffing is a function of manager as managers should recruit staff according to required skill in Starbucks.


As managers of Starbucks coordinate among various department of company so that goals can be achieved smoothly.


P2 Role of leader and function of manager in different situations

The function of manager and role of leader is very helpful for organisation to work in pre set and desired direction which is to achieve organisation goals and objectives. There are different function and characteristics of management and leadership styles which assist smooth functioning of various function of management. The Starbucks is currently facing issues of high prices of raw material which overall leads to high cost of production. As there comes where role of leaders and manager plays an important role to cut down the prices by applying different theories of management which are as follows:

The contemporary theory of management is being applied by the Starbucks in order to reduce the prices. With the help of this theory manager of Starbucks can identify supplier who provides the raw material at lower cost. So that overall cost of production can be reduced. As in this situation role of leader is to motivate the employees and give their best effort and accept any changes made by company.

  • As in the stable situation company can use manager can use management by objective theory which mainly focuses on mutual efforts of employees and managers in order to achieve the organisational goals. Managers set standard of performance and work with employees and leaders are supposed to assign roles and responsibilities to employees so they can perform given task effectively.
  • In the moderate situation manager can apply classical management theory, under this the managers make policies in order to increase productivity of employees. The manager of Starbucks has applied KAIZEN or continuous improvement concept in organisation to improve the work which is related to production. This continuous improvement concept needs involvement of all employees so leaders of Starbucks can participative leadership style in order to make more participation in improving the production activities of company. As when there is moderate situation than this theory can be applied easily and improvement can be made.
  • The fast changing is situation when changes takes place very frequently so in order to cope up with this kind of situation Managers of Starbucks can apply contingency theory which enable mangers to make changes in strategy according to situation. The role of leader is very important to keep motivated employees and staff in fast changing situation. With the help of this theory manager can implement some change in operational activities of company so cost of production can be minimised. The theory assists a company to adopt contigency situation of company and achieve goals of organisation effectively and efficiently.

These are the different situation which an organisation can face and the function of manager is to face these situations and overcome these situations by applying various theories effectively and efficiently so that goals can be achieved. The role of leaders is to keep motivated its subordinate in various situations (Ageron and Spalanzani, 2012).

P3. Different theories and models of approach

The leadership is a technique which is used to motivate the individual or group of people in order to achieve the goals of origination. Leaders are those who influence their followers so that employees can perform task on time. The leadership is to inspire others so that they feel motivated and give their best efforts in accomplishing goals. The leaders use various leadership styles to motivate their subordinated these are described as below:

Situational leadership:

Situational leadership is an adaptive leadership style. As there is not any standard format for this leadership style it adapts the existing working environment and need of organisation. This style is not depend or based on any specific skill of leaders, as under this leadership style the leaders of Starbucks can modify the style of management according to need of situation. This theory has a model which is being adopted by the leaders these are discussed below:


In this, leaders of organisation make decisions and then communicate this to others. As leaders delegate roles and objectives for subordinates and expect that others to accept them. Under this the communication is usually one way only. This style considered as most useful and productive style which gives best outcome.


Under selling, although leaders make goals and objective for others but they consider the advice and suggestion from others. The leaders sell their ideas as to receive cooperation from others.


In this leader invites their followers in decision making process and leave it to their followers to make decisions.


The leaders are obliged for their teams but in this they provide guidance at minimum level to solve issues of subordinates.

Contingency leadership:

This theory mainly focuses on the effectiveness of leadership on the basis of matching leader's style with right situation This theory say there is no best leadership theory as it all depend on how impulsively leaders make changes. The theory descries that there are some variables on which the success depends. The variables are leadership style, qualities of follower and aspect of situation. As the behaviour of leaders changes according to situation, so according to this model one should be flexible and adaptive while leading. As leaders of Starbucks need to be adaptive and flexible in order to achieve goals of organisation. There are some various contingencies can be Starbucks, these are technology, suppliers and distributors, consumer interest groups and government etc. The positive point of this theory is that many researchers have proved this theory valid and reliable approach and has a broad understanding.

Systems leadership:

System leadership theory is applied by leaders when they want to get the work done with enhanced productivity. As under this theory leader set a particular system for working which needs to be followed by their follower while performing the task. This helps leaders to create an effective team in the organisation. This theory can be applied by the leaders of Starbucks as it will help company to improve productivity of employees and organisation. The thory has its features like communication, boundaries, goal directedness and holistic view in organisation. This helps in dealing with the complexity (Kompella, 2015).

Apart from these theories, leaders can use transactional and transformational leadership. The transactional leadership allow leaders to reward for good work of employees and punish them for bad work. In transformational leadership leaders employs charisma and enthusiasm to inspire its followers.

M2 Strength and weakness of different theories

There are various leadership approaches which are used by the leaders and every approach has its own strength and weakness. The main strength of contingency leadership is it is tested and supported by researchers. The weakness of this theory is that it does not explain why people are more effective leaders in certain situations. The systematic leadership style has various weaknesses but the main weakness of systematic leadership is it does not allow new innovation in work as system is already set by leaders. As situational leadership is very useful to adapt different situation and according to make decisions (McCrie, 2015).

D1. Evaluation of different theories and approaches

The different theories have different aspects as some have positive or some have negative impact on the working of leaders. The positive point of contingency leadership is that, according to this theory no theory is best it all depend on how flexible a leader is while Woking. The situational leadership talks about flexibility and adapt the situation accordingly. As it enables leaders to formulate strategy according to present situation and motivate employees to be sustainable in that particular situation. The negative impact of system leadership is that it does not allow new working style in organisation.


P4 Key approaches to operation management

Operation management is a crucial part of organisation in order to maintain and administer the activities of organization and it helps in improving quality in production of organisation. As organisation should manage its operation effectively in order to achieve goals of organisation effectively. The main function of operation management is to enhance the productivity of company with optimum utilisation. Operation management enables an organisation for optimum utilisation of resources. There are various approaches of operation management which can be used by Starbucks, these are as follows:

Six Sigma:

Six sigma is a kind of approach which is used in organisation, which mainly focuses on the group or team efforts in achieving of goals. This approach is helpful in achieving organisation goals effectively and efficiently. It is a data driven approach which eliminates the defects driving towards six standard deviations between the mean and nearest specification limit) in process which is being started from the manufacturing to transactional and from product to services. This process can be applied by the Starbucks in order to eliminate waste from production. As if there will be low waste than the cost of production will be lower and overall profitability will be increased (Kerzner and Kerzner, 2017).

Total Quality Management:

The total quality management is refers to a customer oriented process which aims at continuous improvement of business operations. This ensures that all the employees are mainly focusing towards the enhancing product or service quality. As main aim of total quality management approach is to improve quality of products and services so that organisation goals can be achieved. This increases the awareness of quality within an organisation. As Starbucks can apply this approach in their organisation in order to improve quality and gain more customer satisfaction. The TQM allows employee of organisation come together and work towards continuous improvement. This is a customer centric approach so it is very important for Starbucks to be updated by needs of customers so they can fulfil customers' needs accordingly (Jones and Robinson, 2012).

Just In Time Inventory:

This is an inventory management approach which is used by organisation to manage the inventory in effective and efficient way. This is very helpful in reducing the cost of company as this concept enable an organisation to align their production schedule to supplier and when production started the supplier will send raw material. So organisation does not need to keep any kind of raw material in their warehouse. And warehousing cost can be reduced and profit will be more. The Starbucks can use this approach in order to maintain their inventory efficiently. With the help of this system Starbucks can also reduce their warehouse cost by aligning their raw material schedule with their suppliers (Ageron

M3. Role of leader and manager in improving operational efficiency

The leaders and managers plays an important role in organisation as managers set the goals for organisation and leaders make an effective team in organisation in order to get goals achieved. The managers monitors each and every process so they are aware about where to make changes, so by applying theory of total quality management, manager can improve the operational efficiency of organisation. As the just in time inventory is also very helpful for managers to improve operational efficiency and to reduce the cost. As continuous improvement can also be helpful in improvement of operational efficiency of organisation. The managers can apply continuous improvement in organisation and leaders can monitor which help the company to enhance and improve their operational efficiency (Glukhov and Balashova, 2015).

P5. Importance and values of operations management in achieving business objectives

Operation management is very important for organisation as to sustain in this competitive advantage. The operation management is valuable concept for companies in order to perform operational activities of organisation effectively and efficiently. The Starbucks manage their operation effectively and efficiently in order to enhance their productivity and reduce the cost. The importance of operation management is discussed below:

Helps in improving productivity:

Operation management is very helpful in improving productivity of employee. As main aim of operation management is the timely delivery of product and to successfully convert raw material into finished goods. So the Starbucks can improve productivity of their employees by managing proper operation of business. As by proper measuring of ratio of input to output.

Assist in providing customized products to customers:

Operation management is heart of every organisation. This is the management of various business activities which takes place within the organisation and share in creating the goods to align with customers' needs. The Starbucks can use this operation management and can fulfil the demand of customers. As the company can also charge desirable price of customized products.

Optimum utilization of resources:

Optimum utilization of resources are very important in an organisation as it enables the business to earn more profits. With the help of operation management Starbucks can utilize their resources in optimum way. As by providing proper input and output ratio. With the help of operation management company can minimize the cost of resources and maximise the use of resources (Christopher, 2016).

Maximize the profits:

Profit maximisation is main aim of every business. As operation management allows a business for optimum utilization of resources. The optimum utilization of resources leads to low cost of production and overall profit will be more. The Starbucks can also use operation management in order to maximize their profits.


P6. Factors within business environment which affects the decision of leaders and managers

The business environment is environment which affects the operations of business and related activities. There are different factors which can affect decision of leaders and managers of Starbucks. These are as follows:


The political factors are those which are related with political stability of country. This is an external environment factors which had direct impact on business operations and decisions of leaders and managers of organisation. The political factors include taxes imposed by government and political stability of state and nation. As if government changes tax rate slab then leaders or managers of company have to formulate new policy. So it has direct impact on the decisions. (Artikis and Artikis, 2015).


This factor is related with economic condition of country and has impact on the wider community of business and decisions of leaders and managers. The economical factors includes the GDP, unemployment rate, interest rate and economic stability of business. If there is inflation in economy and leaders of Starbucks have not prepared for this than they have to make some decisions regarding the inflation in order to be sustainable in economy.


Social factors are those which are related with the society, community, taste and preferences of society and demographics etc. These factors come under this, as this factor has great impact on the wider community and on decision of leaders and managers. For example the manager of Starbucks has set some taste of coffee by anticipating that people will like it but when customers has started demanded something else than they had to change their decisions and provided what customers needed.


The technology is changing day by day and one should be very prompt to adopt technology in order to be sustainable in this competitive market. As for example the Starbucks has set up new coffee machine in their outlets but after few days a technology has came which also set automatic temperature in that machine while preparing coffee so now manger of company has to change its decision and have to bring new technology(Beliën and Forcé, 2012)


This factor has great impact on the business environment and wider business community. As this is related with environment protection of country. This is very important for company to follow these laws accordingly. The Starbuck can come up with new eco friendly coffee machine which will led to low cost and more profits.


The legal issues have major impact on company. This is related with laws and regulations of businesses etc. The non following of legal compliances could lead to heavy penalties on organisation. So it can affect the decision of organisation regular activities. The Starbuck needs to follow all these rules effectively and efficiently in order to prevent themselves.

These are the factors which have effect on the wider business environment and community. These factors should be analysed before entering into new markets. The every factors have their own positive and negative impact on the organisation and wider community.

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In the conclusion it can be said operational management plays an important role in the organisation. As there are different role of leaders and function of managers which needs to be performed. There are different leadership styles which can be used by the Starbucks leader as they he plays an important role in company. There is different approaches to operation management which are helpful for regular business operations. Leaders use various approaches in organization in order to motivate its employees. The business environment factors have huge impact on the organisation.

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