Case Study Of Walmart Sam's Club And Costco

1. According to Friedman the moral responsibility of business managers is to make sure the shareholders are taken care of as long as its legal and what they believe is morally correct. A problem with this is sometimes business managers cannot do what they believe is morally correct because they wouldn’t be using their own money, they would have to use the shareholders’ money and they may have never agreed to it. It is very important to keep the shareholders happy because without them corporations would fail; therefore, some things are done unethically. The social responsibilities of business managers according to Friedman is to maximize profits. In order to do this the managers must make the shareholders happy.

2. According to Freeman the

Walmart Sam’s Club and Costco have very different approaches when it comes to how they pay their employees, benefits and quality of their products. SEO of Costco, Jim Sinegal believes that it is better to make sure your employees are treated right and are taken care of in order for good business to happen. At Costco they pay their employees higher wages and give them health care. They make sure they get the lowest price for their customers, while also having good quality. Costco has lower employee-turn over than Walmart Sam’s Club because Costco treats their employees so good that they receive the most loyal and productive workers that want to stay working for them. Walmart Sam’s Club is more profitable because they don’t pay their employees high of wages or give out as many promotions as Costco. Costco is more ethical, because with cheap-labor it can be costlier on other things. For example, it can lead to poverty and other related social problems. Costco’s cost-leadership tragedy is more ethical because everyone benefits from it, consumers, workers, and shareholders. When dealing with moral obligations of managers, I believe Walmart Sam’s Club managers care a lot more about their shareholders. They want to maximize their profits, and they do this by paying their employees low wages. Costco’s managers on the other hand really care about their stakeholders. They do care about their shareholders as well, but they believe by taking care of their stakeholders, their shareholders will benefit from it. While most Wall Street analyst disagree with Mr. Sinegal, saying that he is “overly generous” and that “it’s better to be a to an employee or a customer than a shareholder” (81), he is doing the right thing. I do agree with the way he does things and believe it will help with the standard of living for the future, because it isn’t harming it, like Walmart