Business Management Case Study: Costco Wholesale

803 Words 4 Pages
Jim Sinegal is the Chief Executive Officer of Costco Wholesale, which employs more than 120,000 employees worldwide. As one of the largest retail companies in the United States, Costco is dedicated to providing quality products at the lowest available prices for its customers. The success of the company relies in its high efficiency, adaptability, and human capital.
Identification of the Main Issues/Problems/Questions
Jim Sinegal uses organizational effectiveness, performance determinants, situational variables, leadership decisions and actions to create a company where people would enjoy working. In this case study Yukl states, “he understands how important it is to have talented people working for a company, and he does many things to attract
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One approach is to use leadership behaviors to directly influence individuals and groups. The second approach is to make decisions about competitive strategy, organization structure, and management programs. Flexible leadership theory also consists of four sets of variables: organizational effectiveness, performance determinants, situational variables, and leadership decisions and actions. Yukl explains that effectiveness depends on three different primary performance determinants: adaption to the environment, efficiency and process reliability, and human …show more content…
Costco also maintains its human capital by promoting from within the company which gives all employees an opportunity for advancement which keeps their turnover rate at the lowest average in the industry.
By pursing feasible alternatives, Costco has continued to maintain its low price competitive strategy while providing higher compensation for employees. Costco uses many innovative methods to reduce operational costs at its stores, such as the no-frills interior design which is basic for product displays. Since Costco does not advertise, there is no need for the company to employ a public relations officer or a costly advertising agency; therefore marketing expenses are also considerably low. The CEO also limits his salary and bonus to no more than twice what a Costco store manager

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