Costco: Ethical Business Practices

894 Words 4 Pages
People say labels define who you are, but what about the company behind these labels? What do the kind of business practices you support say about you? Companies that have ethical business practices value their employees, are honest in business dealings, value their social responsibility, as well as have pride in their products. When a company values ethical business practices they generate more profit long term as they develop into sustainable businesses due to the fact that consumers support companies they trust and respect.

Consumers want to support companies that are founded based on ethical beliefs supporting their values, resulting in a larger profit for the company. When a company is founded on ethical beliefs it means that they were
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Ethical companies treat their employees fairly, which in turn benefits consumers by providing a stable company to buy their products from thus generating a greater profit. Costco is a very successful company that has strong ethical business practices as they focus on their employees. Employees earn a high wage of on average, 21 dollars per hour (Huffington Post) and a work in a positive environment. These factors generate a stable, long term workforce, the foundation to a sustainable company. CEO, Jim Sinegal, focuses on employees and by extension, customers. Due to the happy and engaged employees, Costco continues to improve in regards to product mix and sales, as employees in the warehouse are happy to give their feed back to headquarters (Bloomberg.com). By investing in their employees Costco has provided their customers with a sustainable business that provides them with excellent customer service as well as more and better products at low prices. This results in expanding and reoccurring business from happy consumers, proving that companies that have ethical business practices yield greater …show more content…
These businesses may initially be successful by taking shortcuts to increase their profit however, due to the power consumers have on a company’s profit, the company could fail in the long run. If a company takes a shortcut, such as uses child labor or improperly disposed waste to save money and this does not reflect the values of their consumers, their image could be tarnished. With modern day technology everyone can share their thoughts and opinions with the world through social media and as more people speak up about the issue, the company receives a surplus of negative attention. This could end up costing a company millions in lawsuits, legal fees and reconstruction of their image, significantly lowering their profit. Nike is a famous company that saw the effects their lack of ethics had on their profit. In 1996, Nike was accused of child labor in Pakistan and Cambodia, as well as poor working conditions in China and Vietnam. This started a strong anti-sweatshop activist movement against Nike as a result “in the period between August 997 and January 1998, Nike’s stock on the market fell from $66 per share, to $39 per share” (Mocciaro Li Destri, 127). This drop in stock is proof that consumers don’t want to buy or support companies that are associated with unethical behavior which ended up

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