Starbucks Corporation (NASDAQ:SBUX) is finally coming to terms with life. The company has made a major shift in its corporate strategy this week by announcing its first dividend. It is not that Starbucks has promised to give away the company in dividends, but it is certainly a major development for a company that is in business for more than 20 years and never declared a dividend.

Typically, companies with high growth potential have a tendency to reinvest the profits in the business instead of pleasing the shareholders. The approach has its merits – companies don’t need to look outside for funding which in turn reduces interest burden and improves profits. The dividend loss to shareholders is usually recuperated through the capital appreciation.

Does it mean that Starbucks is no longer a growth company? For starters, it has already closed around 900 money loosing cafes in last couple of years reducing US$600 million in costs.

On the face of it, yes. It looks the company is taking all possible steps to make sure that it remains in the business. So much so that it is willing to do away with its growth oriented business model. So our beloved Starbucks, after enjoying much success in late 90s and till 2007, having seen the sales plateau coming, decided to distribute the wealth. Are we missing something here?

On the growth strategy, Chief Executive Howard Schultz differs, “The dividend is our opportunity to reward our shareholders”. The 10-cent quarterly dividend is part of its scheme of distributing 35 to 40 percent of earnings among shareholders. True, the company is going to record lesser expenses this year on account of reduced cafes. In addition, the company now plans to buy back 15 million common shares, up from earlier offer of 6.3 million shares. Chief Financial Officer Troy Alstead expects the moves to "significantly and rapidly grow shareholder returns" in 2010.

These developments are anything but signs of mature, un-innovative and dying corporations. The steps make one think, hopping on the dividend accelerator and reducing the numbers of shareholders at the same time is going to have a null effect on the profits. As it transpires, it isn’t a brain dead approach to business, but rather a sophisticated attempt to ensure short term attractiveness of the company among investors. For the long term, the CEO has already ensured a no flab operating model. Shares of Starbucks are trading up 2 percent on NYSE close to 52 week high.