Every organization has a list of stakeholders who depend on firms to provide the products and services they demand. Stakeholders are the individuals and groups who are depending on the firm in order to achieve their personal goals and whom the firm is depending for its existence. These individuals effect or are effected by the achievement of the organizations objectives. Companies or organizations depend on employees, customers, suppliers, investors, and communities in order for their business to run efficiently. Costco, the well known retailer has successfully determined what is important when it comes to productivity from their employees, and brand loyalty from its customers. What is important is what the firm does and how they do it which …show more content…
can result in the success or failure of an organization. Costco Wholesale - Stakeholder: Employees Costco is the second largest retailer in the United States, having 400 locations within the U.S.
and over 200 warehouses in Canada, Mexico, Australia, the UK, and Asia. The company has certainly set the standards high and prides itself on doing “ the right thing.” According to a CSR analysis, Costco has arranged its stakeholders in importance as such: Employees, Customers/ Members, Investors, and Communities (Greenspan 2015). The company follows their own code of ethics promising to take care of members, employees, and suppliers and obey the law.Placing its employees as the top priority is resulting in significant success for the company. Costco employees are paid higher wages with salaries reaching $40,000 per year. Employees are offered a substantial amount of benefits including health benefits, 401(k) plans, reimbursement for medical expenses, disability insurance, life insurance, and long term care insurance to name a few. The way Costco has decided to reward their employees for their dedication and hard work has triggered more productivity, a sense of pride coming to work, and a 17% employee turnover. This is saving the company $368 per year in employee turnover costs (Caitlyn H. …show more content…
2012). Costco - Stakeholder: Customer / Investors / Community Customers are being satisfied by quality and affordable products. They are offered low prices for wholesale bulk products which compete with Walmart, Sams Club, and BJ’s however customers remain loyal to the Costco brand. With a renewal rate for membership at 90% and the lowest shrinkage rate in the industry, Costco is proving to be doing something right. Investors are an important aspect to the business growth end of the company. They “determine the capital available to grow the business” (Greenspan 2015). Investors also a contributing factor to the profitability of the organization. Costco pays close attention to their communities by donating, fundraising, and volunteering. The community is said to affect consumer and employee perception about Costco, so it is important for the company to remember their importance. Communities must be engaged through a well crafted business model and effective marketing practices (Hopp 2014). Costco - Stakeholder: Charitable Organizations Along with the four stakeholders Costco chooses to focus with high importance, the company still shows to be socially responsible in multiple other aspects of the organization as well. Costco has raised over $17 million in the U.S. and Canada alone in 2013 focusing on charities supporting children, education, health and human services. The company has made it easier and fun for employees to be engaged and donate. By just swiping their card they can donate, however a sense of friendly competition arises by being able to view donations in other locations (Mallek 2014). Suppliers have their own code of conduct with Costco. They must be treated with the utmost respect, avoid conflicts of interest, honor all commitments, protect all suppliers property, and not accept gratuities. Keeping suppliers happy is key, since they are the ones stocking the shelves. Costco feels “ our suppliers are our partners in business and for us to prosper as a company, they must prosper with us” (Greenspan 2015). Costco- Stakeholder: Environment Costco is aware of the surrounding environment and takes initiative to “ reduce its environmental footprint.” The company has been known for recycling cardboard since the beginning, but with new ways to contribute, Costco is doing much more.
They have constructed its warehouses from 80% recycled steel, reduced the amount of plastic used in packaging, created an energy policy, and sustainability efforts. Costco has introduced the idea of installing skylights using natural light rather than fluorescent lights. They aim to reduce the use of resources and generation of waste and to lead by example. Leading the industry, Costco sets examples of being socially responsible, and proves how this can result in success within your organization if implemented correctly. The company fosters “ a wide range of stakeholder friendly actions to their suppliers, employees, and consumers alike, which has given them a strong competitive advantage” (Caitlyn H.
2012) Student Insight Costco is just one of the many companies that truly preforms ethically. They have shown how successful companies must treat their stakeholders in order to create brand loyalty amongst their employees and customers. Costco is the model for social responsibility and they have gained their success by their low price strategy, productivity enhancement methods, and a skilled and motivated work force. CEO Jim Sinegal has structured the company in a way that focuses first on its employees since they “ directly influence business performance” (Greenspan 2015). Next on customers who effect the success of sales and revenues, the investors who allow the business to grow, and on the community which effects the perception of the company. Costco has emphasized the importance of its stakeholders. Focusing on profit optimization, emphasizing the importance of striving to meet the needs of stakeholders broadly defined, over the medium to long term ( Chandler 2014). By instilling these important values into their operationalization, they lead the way for other companies to follow suit.
They are the face of the company, therefore if a big group of employees are not satisfied with the running of their Waitrose store, or John Lewis shop, or their salary then then the products and services would therefore differ leading to that particular store having a bad reputation. From a media perspective this would therefore give the JLP poor publicity, and a threat of losing staff could be high. Secondly, employees are an important stakeholder because they are all owners, as the company’s business ownership is through a partnership. Each year the employees will receive a percentage bonus of their salary, dependent on
Stakeholders are individuals and constituencies that contribute, either voluntarily or involuntarily, to its wealth-creating capacity and activities, and who are therefore its potential beneficiaries and/or risk bearers1. There are several different types of stakeholders associated with a corporation, and those stakeholders can have different views and opinions on what corporation's goals should be and how they should be running. I have interviewed three different stakeholders of Staples Inc., an employee, a customer and a stock holder, to find their relationship between them and the firm. Then, I will use this information to suggest how the firm should proceed and continue to have a better and more beneficial relationship with its stakeholders.
1. Costco claims to break all the rules in retailing yet continues to be one of the most successful companies in the supermarket industry. In the context of the four P’s, select four unique Costco tactics identified in the video and explain how each of them help drive Costco’s success in the market (5 points).
Their ability to distribute the cut rate from their operating proficiencies in supply chain management and cash flow, permits them to offers items at discounted rate and a lower price than their competitors. For Costco the meaning of being the low-cost provider while also differentiating from the competitors is ambiguous at best. Costco’s CEO, Jim Sinegal, is certain that low priced, and the high value merchandises are exactly what is needed maintain and achieve a staying power in the industry. Costco also entices their customers with low prices on designated set apart products available only at their stores. Within these designated products, Costco provides a limited selection of nationwide brand-named merchandises in some wide categories. Their approach comprises of selling a limited number of items, keep their costs down, maintain a high volume, compensate employees well, ensure that customers buy their memberships, and target upscale small-business owners through their business only
There are two main types of motivation when people work for an organization: intrinsic and extrinsic. From those two, various types of motivation can be derived ranging from achievement and competence motivation to fear motivation. Costco utilizes various motivational techniques and we can analyze them from the traditional, human relations, and human resource approach to determine how Costco is different from most retail store of similar size. From the Human Relations approach, Costco has a low turn-over rate even with the use of part-time workers, the insurance enrollment period is lower than that of other retail stores, and the portion of health care premium paid by the company is over 92% From the traditional view, Costco has a higher wage on average, well above that of minimum wage by at least 40%. From the human resources perspective, Costco chooses most of its management position from its internal workforce.
Healthcare industry of U.S. is a complex industry made up of a diverse workforce. Healthcare organizations are constantly in need of new strategies to survive in a competitive environment. For a successful organization, it is important that decisions are made in the best interest of all the stakeholders. According to Celluci & Wiggins (2010), a stakeholder is an individual, group, or entity that has an interest in organization’s success. Stakeholders include all employees, patients, community and healthcare providers.
Costco has one of the most competitive benefits packages in the industry. Not only do they provide employees with a full spectrum of benefits, but employees also may elect coverage for their spouses, children and domestic partners. The company pays a larger percentage of the premiums than do most other retailers. Costco's customers like that low prices do not come at the workers' expense. And The Costco website offers online tools to manage health.
Environmental awareness has also become a distinctive competence for Walmart. The company has a genuine concern to reduce their environmental footprint, which will appeal to customers who support this initiative. They are leading the way for other big-box retailers who can make a big difference with small changes. All of their goals and objectives are published in the annual statement for shareholders and the general public.
For every company employees group is the most important stakeholder group. If a company has happy employees their customers will be doubly pleased.
Hence, the stakeholders which are described as those who are affected by the organisation performance ,actions and duties and those actions includes employees, clients, local community and investors as well. The theory of stakeholders also suggests that it is the responsibility of firm to make sure no rights of stakeholders are dishonoured and make decisions in the interest of stakeholders which is also the purpose of stakeholder theory to make more profit and balancing it while considering its stakeholders (Freeman 2008 pp. 162-165). In the other words organisation must also operates in a more socially accountable approach by carrying out corporate social responsibility as (CSR) activities.
It will be advantageous for the company if they can project themselves as responsible corporate citizen and an environment friendly company. Social enrichment schemes, recycling schemes and educational funds can be initiated to cater to this cause and long term goal.
The corporate social responsibility is a commitment by a business to contribute to economic development while improving the quality of life for employees and their families’ as-well as contributing to the society. Walmart is a well-known company that offers customers the items they want and need at a low cost, with nearly 4,000 stores in the United States. According to the Fortune 500, Walmart was ranked number 1 in 2015. Just like any other superstore Walmart needs to continue the use of social responsibility by recreating a relationship between business and the community especially if they want to dominate the competition in 2016. The use of sustainability, strategic philanthropy, causing market, shared values, stakeholders and global perspective will help readers understand the purpose of social responsibilities in the corporate world.
Stakeholders are interest of an individual or groups that directly or indirectly affected by the organisation’s activities, policies and objectives (Henry Frechette, 2010). Stakeholders can be divided as internal (managers and employees) and external (shareholders, customers, and suppliers) (BPP F9). Different stakeholders may have common interests or conflict interests with company. Company board members or management must take care about stakeholders’ interest. They can’t make the decision based on their own interest or their relation with others organisation. Conflict of interest will arise when interests of organisation act in concert with managers’ personal interests or interests of another person or organisations, (Anon, no date).
The sustainability of ecosystems on which the global economy depends must be guaranteed. And the economic partners must be satisfied that the basis of exchange is equitable” (World). This quote demonstrates the complexities of sustainability. Another thing corporations should focus on when trying to be sustainable is their environmental impact. Annie Leonard in her book The Story of Stuff says that companies can significantly reduce their toll on the environment by changing their design. The design determines “the amount of energy used in making and using the product,” “the length of the product’s life span” and “its ability to be recycled” (Leonard). All these things determine the amount of resources a company must use, so simply changing a product’s design is one way a company can have a large impact on the sustainability of the environment in which it operates. One example of this is that “Wal-Mart attributed more that $100 million of its 2009 revenue to a decision to switch to a recyclable variety of cardboard in shipments” which it sells to a recycler instead of paying to send it to a landfill
Stakeholders refer to individuals or groups of people that have an interest in a business. Management argues that as long as there is wealth for shareholders, then anything is done in a responsible manner and things should be done to promote the interest of other stakeholders.