Costco Research

Topics: Employment, Organizational culture, Costco Pages: 5 (2112 words) Published: November 5, 2008
What is the American Dream? There are as many opinions on that topic as there are individual minds to think about it. But one thing stands clear: People want to feel appreciated and respected. People want to be happy. Think about it, most people have to work for a living. Wouldn’t it be great to be able to have all that at once? Of course! Who wouldn’t want that? After some research, I have determined that working for Costco can meet those needs. While some companies put major importance on various aspects of employment, it has become clear that what works best is to focus on your employees and their state of well-being. Costco is known in the business world as a great company to work for. There have been stories in the media saying such. The turnover is very low, barely over 5%, and the pay is very good (Desjardines, 2008). Costco’s culture is appealing because Costco seems to send a message that they value each and every employee. Each person is made to feel that they are valued as a person, and not just cashier #4, for example. This is something that most people find they need out of a company. The more valuable one feels, the more they are willing to do the best they can for the company. Costco seems to have a very dominant culture, in that their core values are shared by most employees. The turnover rate is low. That sends the message that employees that work at Costco are happy, and have no desire to look elsewhere for employment. This is something that I share with Costco. No one likes to look for jobs, go on interviews, start a new job, be the newest employee, etc. These are all things that take a person out of their comfort zone. Once you find a job with a company that you can share your goals with, you should plan to stay there until one of you changes your goals. That being said, it is obvious that Costco has a very strong culture. The fact that there is a low turnover shows that the core values are shared among employees. When employees agree on the values of a company, you will find that there is cohesiveness, loyalty, and organizational commitment (Robbins, 2005). Of the seven primary characteristics of organizational culture, Costco embodies People Orientation. Management takes into consideration what the outcome of their decisions will be on the people who work there. Even their executive management “walks the walk” so to speak. Their CEO only makes $550,000 a year, which is considerably lower than many other large corporation’s CEO’s salaries (Desjardines, 2008). The fact that their owner and CEO still wears a nametag just like any other employee shows that he continues to have an attitude that keeps him in touch with his employees. When the company had to increase the amount employees were contributing to their healthcare benefits, he sent an apologetic letter to each and every employee, explaining the reason why the increase was necessary. In response, he received over 100 letters and emails showing their support (Desjardines, 2008). The culture at Costco is an ethical one. The company has a very powerful and positive influence on employee behavior (Robbins, 2005). The company will treat you invaluable as long as you follow the golden rules they put into place: to work hard and respect customers. One major ethical decision of the company is to not accept any gifts from any vendors. In fact, to show that no vendor is more important than any other, Costco sends out a letter to each and every vendor every year remind them that they do not accept gratuities. They add “don’t even send peanuts” to the letter (Desjardines, 2008). If this is not an example of ethical behavior, I don’ know what is. Let’s talk for a minute about the ways that Costco motivates it’s employees. The core to their fabulous reputation is their CEO, Jim Sinegal. Jim shows up to work in a shirt and tie he buys from Costco, and a nametag that reads “Jim”. His nametag is no...

References: Childers, P. (2005). Organizational culture affects the bottom line. HR Magazine, September(2005).
Desjardines D., (2005). Culture of Inclusion: where top executives lead by example. Retailing Today. Retrieved May 23, 2008, from
Goldberg/Ritter A.B/B., (2008). Costco CEO Finds Pro-Worker Means Profitability. CBS News. Retrieved May 26, 2008, from
Kjerulf Alexander, (2007). Analysts to Costco: Stop treating your employees so well. Positive Sharing. Retrieved May 25, 2008, from
Robbins, S.P. (2005). Organizational Behavior (11th ed.). Columbus, OH: Prentice Hall.
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