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How can organisational culture be managed
Aspects of organizational culture
Aspects of organizational culture
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Costco is known for its strong culture, in 2013 Co-founder Jim Sinegal was asked if he thought culture or strategy was more important. Sinegal responded “I've stated this in the past, and my comment is that culture is not the most important thing in the world. It's the only thing” (Nyrnes, 2013). Costco excels at every level of the organizational culture and it shows. This is obvious when shopping at Costco, due to this deeply ingrained organizational culture there is an exceptionally positive external environment. The employees all project a positive attitude, willingness to help, and genuinely care if you have a great shopping experience. Sinegal attributes maintaining such a strong culture is the result of treating Costco like a small business, …show more content…
of course this is difficult with a worldwide company, with over 175,000 employees. Although Costco excels on all three levels: seen, heard, and believed in this essay I am going to focus on the heard level. The heard level of organizational culture determines how decisions are made and explained, and the widely shared assumptions and beliefs in a company.
This level influences what the public observes when they visit the stores. This is where policies and procedures are created dealing, with every aspect of the organization. I believe the most important part of this level is how the company treats their employees. While company’s like Walmart have an estimated 50% annual turnover rate (Zimmerman, 2004), Costco boasts a 25% turnover rate. While Walmart pays their employees just enough to place a full time employee over the poverty line, Costco pays its employees approximately 40% higher wages. In addition to higher wages, Costco instills that they really care about their employees. Sinegal was asked in an interview what keeps the turnover rate so low at Costco. Sinegal responded, “We love them” (Nyrnes, 2013), and went on to explain that his employees play a pivotal role keeping Costco going and he wants them to feel like the company cares for them. In the Motley Fool interview Sinegal explained that Costco try to promote from within the company since this gives people the feeling they have a chance for advancement, to think of Costco as a career and not just a job. These ideas are part of what makes Costco the company it is. The culture Costco instills shows that they aren’t purely interested in turning a profit like other retailers, they really care for the
employees. The organizational culture instilled at Costco should be a model to all retailers. They don’t squeeze out every penny they could by limiting employee benefits or reducing pay, and by doing this they offer a great shopping experience with staff who have a vested interest in the success of the company. For example, do you think a cashier at Walmart cares if you had a good experience, or if they project a positive attitude. I personally hate going to Walmart, the people are miserable, and no one is ever there to help you. This is where the external environment comes in. I can probably find somethings that are cheaper at Walmart, but since the external environment of the store is atrocious I would rather pay a little more and have a better experience. In contrast, Costco as an outstanding external environment and gives customers a great experience, beginning with the helpful courteous employees, clean stores, and quality products.
Costco’s business strategy is different from their competitor’s in the wholesale retail industry because their purpose is to keep overhead down and pass the savings to their customers. They do this by choosing not to advertise, sell fewer brands and having an innovative approach by having their own manufacturing facilities for a variety of merchandise. Costco does not market their warehouses and their marketing is through word of mouth from current customers who also must have a membership to shop at Costco. When compared to Walmart Costco sells four brands of toothpaste and Walmart sells sixty brands of toothpaste. Costco can buy more for less from the manufacturer of the four brands of toothpaste and pass the savings on to their customers. Costco’s strategy is to sale a limited number of items because this strategy according to (Lutz, 2013) “increases sales volume and helps drive discounts.” Because of Costco’s profitability in the retail market they have managed to continue to be profitable even in an oppressed economy. Costco’s focus is on high-end customers indicated by some of the brands they carry such as Coach Handbags. Costco offers three different levels of membership and is only open to customers who have a membership. Costco’s philosophy is they do not advertise or markup items more than 15% in order to save their customer’s money. These practices lowers the overhead costs and continues passing the savings to the customer. Costco is an international company and has (Costco Wholesale Corporation, n.d.) “462 locations in 43 U.S. States & Puerto Rico; 87 locations in nine Canadian provinces; 25 locations in the United Kingdom; 10 locations in Taiwan; 9...
Each organization big or small has its own values, ways of doing things and assumption that it operates in. The principles and ethics that exist in each of these companies are the baseline through which the company operates its affairs. This is what can be called as that organization’s culture. The culture in existence has an impact on the productivity, effectiveness and efficiency (Keyton, 2011). The basis of setting the most appropriate culture of a company is not only to move or increase the profitability but also to make the stakeholders happy and satisfied. One aspect of that is the employee or the human resource the firm who put their expertise in the firm and add a bit of creativity and innovativeness to move the products. Chick-Fil-A operates in a competitive industry thus it requires all the stakeholders.
Costco Wholesale Corporation was an uncommon type of retailers called wholesale clubs. These clubs differentiated themselves from other retailer by requiring annual membership purchase. Especially in case of Costco, their target market is wealthier clientele of small business owners and middle class shoppers. They are now known as a low cost or discount retailer where they sell products in bulk with limited brands and their own brand. The company is competing with stores like Wal-Mart, SAM’s, BJ’s, and Sears. The case begins with an individual shareholder, Margarita Torres, who first purchased shares in 1997 and who is trying to evaluate the operational performance of the business in order to make a decision rather or not purchase more shares
“Culture is not the most important thing. It’s the only thing.” (Gabler, The Magic in the Warehouse, 2016). It has been said that “Costco acts more like a cheerful cult than a hard-driving business.” (Gabler, The Magic in the Warehouse, 2016). Costco hasn’t wavered from their founder’s strategy of promoting within; over 98% of their management started their careers with Costco. This strategy clearly works; the environment is one of family not just coworkers. They are loyal to the brand and motivated to work hard and climb the corporate ladder. Costco sees this as ensuring the future of their values which in turn ensures their
Promotion: Costco doesn’t have any conventional marketing/ promotion strategies like their competitors as they are not big on advertising. They email and mail their members flyers and product descriptions which help them maintain their customer retention. However, they don’t actively advertise to new customers, primarily relying on their current customers to advertise by word of mouth like Kimberley Peterson, the
Which one is better Buy Now: Wal-Mart Stores, Inc. vs. Costco Wholesale Corporation? Costco is doing better, but Wal-Mart stock is much inexpensive. Which one is a better buy right now? Here are two different retailers with two different strategies. The alternative norms are that Costco operations are entirely based on the warehouse model and membership fees offer customer more of an economic advantage to customers than Wal-Mart everyday low prices and flexible payment with suppliers. My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer
Overall, Costco exploits the Porter’s value chain elements to increase the productivity and efficiency of its operations while also lowering the cost of margins related to the operations of the organization (Guo, 2016). These benefits result in different competitive advantages to the company, which in turn increases the profitability of the organization. For each of the Porter’s value elements, the different stakeholders of the company are also impacted positively. Financial Analysis of Costco Table 1:1 Financial Data in Comparison to the Competitors 2016 2015 2014 Costco Revenue 1620 1467 1350 Net Income 76 72
Organizational cultural is the system of shared beliefs and values that develops within an organization and guides the behavior of its members, while organizational structure is an expression of social and economic principles of hierarchy and specialization (Kinicki, 2015). Both the culture and the structure of an organization are important things for management to understand in order to successfully set and achieve an organization’s goals. Companies who excel in highly competitive fields can attribute their successful economic performance to a cohesive corporate culture that increases competiveness and profitability. This culture is best utilized in an organization that has the necessary structure to allow its employees to coordinate their
This case study will examine the key management practices that make Trader Joe’s successful. Sound management practices have been a catalyst for the long-term financial success of Trader Joe’s. The literature review examines Trader Joe’s approach to management practices. The research will analyze the: employee job satisfaction, management practices, importance of human capital, and contingency planning.
The definition of corporate culture is the beliefs and behaviors that determine how a company 's employees and management interact and handle outside business transactions (Fisher). A culture of a company can very it can be fun and relaxing or uptight and all about business what ever it is the way the company does everything from how they sell their products to how you are expected to work . A lot of people think of Google when they think of place that has good employee culture, but all the extravagant things that they offer doesn’t mean that that is the only thing that makes for a good employee culture. For example the human resource department at Netflix is more typical not offering any nap times or special foods but it offers things on a
Blandino, S. (2012). Amazon’s Culture: How to Shape an Enduring Organizational Culture. Retrieved from: http://www.faithvillage.com/article/81939068ed36450197491582db1d7b21/amazon
Since I have been back in school, one of the things I have learned is that every company has a culture and every person as a brand. These are very important in the growth of a organization, business, or person. So I have decided to look into the organizational culture of two companies. One of supports the needs of people and the other the wants of people. The other supports the wants of the people. I have chosen the supermarket retailer H.E.B and the satelite service of DISH network. This important to me because when living in Texas my family gets their groceries from there. I want to know that we are getting what we paid for. I have never had any problems from them and want to make sure that my family and I continue to get that same quality.
C & C Grocery’s initial organizational structure operated under a vertical linkage. Vertical linkage is utilized to “coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization” (Daft,2013) Store managers were responsible for the grocery line, front-end department and general store operations but had little knowledge about merchandising, meat and produce. Instead, their duties included cleanliness of store, employee appearance, and sufficient checkout service and price accuracy. Store managers wanted to be trained in management skills to allow them opportunity for promotion to higher positions of district and regional management. With the original structure, store managers operation activities actually prevented them from learning these skills, such as merchandising. Frustration ran high with the store managers as the district store supervisors only focused store visits to assure that company operating standards were being practices, instead of training store managers to run their stores more efficiently. The decision to have a district specialist in grocery, meat and produce created an uneven hierarchy as the meat and produce managers reported to their specialist not the store manager. This created tension in the work environment as these departments acted independently and uninterested in the other departments. This structure in general contributed to poor communication, lack of priority for employee development and employee dissatisfaction which in turn lead to poor performance in the chain.
...e policies result in satisfaction of employees, so Starbucks has lower turnover rate than market competitors. As a result, better working condition, and great organisational culture help them to perform better. For the company, Starbucks can keep experienced employees longer so that they can provide better quality of product and service, also can save expenses from recruiting new employees. The dimension of People orientation leads company to make a friendly and flexible working surroundings to attract talented new employees and retain current employees. These days just high wage can't attract the best people. They are not just asking for better wage. Friendly, enjoyable working condition and company's environment are also critical factors to choose working place. When the employee's satisfaction is increased, more people will be staying in their current work place.
Corporate culture is the shared values and meanings that members hold in common and that are practiced by an organization’s leaders. Corporate culture is a powerful force that affects individuals in very real ways. In this paper I will explain the concept of corporate culture, apply the concept towards my employer, and analyze the validity of this concept. Research As Sackmann's Iceberg model demonstrates, culture is a series of visible and invisible characteristics that influence the behavior of members of organizations. Organizational and corporate cultures are formal and informal. They can be studied by observation, by listening and interacting with people in the culture, by reading what the company says about its own culture, by understanding career path progressions, and by observing stories about the company. As R. Solomon stated, “Corporate culture is related to ethics through the values and leadership styles that the leaders practice; the company model, the rituals and symbols that organizations value, and the way organizational executives and members communicate among themselves and with stakeholders. As a culture, the corporation defines not only jobs and roles; it also sets goals and establishes what counts as success” (Solomon, 1997, p.138). Corporate values are used to define corporate culture and drive operations found in “strong” corporate cultures. Boeing, Johnson & Johnson, and Bonar Group, the engineering firm I work for, all exemplify “strong” cultures. They all have a shared philosophy, they value the importance of people, they all have heroes that symbolize the success of the company, and they celebrate rituals, which provide opportunities for caring and sharing, for developing a spiri...