Costco: Join the Club

1936 Words Dec 28th, 2013 8 Pages
1. Describe the culture at Costco.

Organizational culture has been described as shared values and beliefs that underline a company’s identity. A strong culture that encourages employees from the top to the bottom in adaptation and change can increase organizational performance by energizing and motivating employees, shape behaviors, unify personnel in the goals / objectives and align employee’s actions with the priorities of the company (Daft, R., 2013). Creating a constructive culture should be a manager’s top priority because the right culture will propel a company into a top performer in its industry. Costco’s culture is one where the customer and employee come first. Customers enjoy a 15% markup where most retail stores increase
…show more content…
Upper management does not have the normal frills of personal secretaries, luxury offices and company paid cars. These perks are not part of the management style from the president of the company on down. Additionally, most managers wear casual attire, wear name tags and work the store floor a good portion of their shifts. Although unorthodox from the “typical” large profit company, Costco’s organizational philosophy is a teamwork approach where employees feel comfortable around store managers and upper management. A study completed by the University of Michigan revealed that as employee motivation improved, the a company’s stock reached higher subsequent returns the following year, spanning times both good and bad. As an example, in 2002 the Standard & Poor 's 500 returned negative 22%. Yet the study found that for every five points added onto a firm 's Employee Motivation Index--how the study kept score--it returned an additional 2% in stock price the following year (Serchuk, D. n.d.). Costco subscribes to this type of belief in that a satisfied employee that enjoys higher wages, potential for bonuses, job security and full appreciation for their work is not only recognized by management, but taken into consideration when promotions for other positions are considered. Cultures that do not encourage constructive adaptation can possibly hurt an organization if a
Open Document