Costco looks to buy from local suppliers in order to cut down on distribution costs and appeal to the local tastes. This also benefits the local economy by supporting local businesses which in turn benefits Costco. Another reason why Costco globalizes is to stay ahead of its competitors, which prevents them from being a threat in the future. By expanding its market reach far and wide, Costco is safer from shifts in the market related to prices and products. It has many inflows of profit from all of its stores that it can rely on.
Costco Wholesale is an international company spanning eight countries, but mostly limited to North America. Costco has been in operation since 1983 when its first location opened in Seattle, Washington (“Costco Wholesale Corporation”, 2018). As of 2017, 746 warehouses are open and operating worldwide. Costco is unique for several, including its membership program and it limited selection of products at a good price. Costco warehouses sell anything from fresh and dry foods, electronics, books, apparel, pharmaceuticals, and home furnishing.
Therefore, it is imperative that organizations recognize that the actions of management in stakeholder relationships could affect the business operations of hotels. Stakeholder theory expanded on the concept of CSR. The theory identified the various stakeholder groups that were influenced by the way an organization conducted business. Freeman (as cited by Appiah, 2016) said that many CSR activities have various degrees of importance to stakeholders in any organization. The interests of the traditional group of external stakeholders cannot be satisfied without satisfying the needs of internal stakeholders according to Foster & Jonker; Hawkins (as cited by Appiah, 2016).
A long reigning business is determined by how it copes with developing societies and generations. Its success is guaranteed long term if it is constantly insuring overall satisfaction to all involved parties. This is known as the Stakeholder theory. Although it isn’t necessarily every business’s responsibility to go the extra mile, the stakeholder approach insures a smooth blend of business efficiency and ethical behavior (Andrew L. Friedman and Samantha Miles, 2006, p.63). It is a bargain for all parties involved, especially the shareholders.
Stakeholder Theory Mackey’s leadership is based on stakeholder theory. Stakeholder theory consists of “A conceptual framework of business ethics and organizational management which addresses moral and ethical values in the management of a business” (“Stakeholder theory”, n.d., para. 1). Ultimately recognizing the responsibility to deliver value and effect change for all parties who may benefit or be at a loss for the decisions made within an organization. Stakeholder theory further solidifies Mackey’s commitment to leading his organization in the fulfillment of their mission – “whole people, whole food, whole plant”.
Why don't all employers treat their employees as well Costco does? Other retailers differ in treating employees when compare to Costco because • There is no equity in pay scale for example entry level employees are paid with minimum pay of around while top managers are paid abnormally high. • Profits or revenues gained by organization is credited to top level managers rather than full time employees. • Implementing health insurance and retirement plans to all employees will cause financial burden to organization. • Not recognizing the economic impact and burden caused by employee turnover to the organization.
It aims to create and optimise value for all stakeholders of the business, where this act is suggested to be able to lead a healthy, sustainable and resilient business, thereby to maximise the shareholders’ wealth. Conscious business comprises four arms: Purpose, Culture, Leadership and Stakeholders (Figure 1). With reference to the title, this text focuses on the Stakeholder Theory of conscious capitalism. Figure 1. Conscious Capitalism
Costco recognizes that its customers are the reason for the company’s success. It acknowledges that there are many alternative-shopping experiences and strives to ensure that their customers receive a 100% satisfaction guarantee, a welcoming shopping experience and top-quality products that are not only low in price but also high in quality and safety. The two biggest competitive advantages that Costco has are its loyal customers and their “absolute pricing authority” that allows them to guarantee low prices. (Delete) Lastly, Costco strives to respect its supplies. Costco wants to create positive and honest buying and disturbing among all who work with Costco.
2.2 STAKEHOLDERS A stakeholder is any individual or group that either positively or negatively, impacts or is affected by the choices and activities of an organization. It can likewise be alluded to as any individual or group who has a personal stake in the result of an organization's activities. Stakeholders are classified in view of the degree to which the choices of the organization influence them. We have the individuals and groups who are directly influenced by the choices of the organization, and there are the individuals and groups who are not specifically affected by the choice of the organization. Cases of direct stakeholders include employees, creditors, contractors, investors, owners, customers, clients, consumers, shareholders,
With good reputation, it helps firms to create competitive advantage in the business environment. Thus, instead of focus on short-term profit maximizing or costs saving, firms should be stakeholder-oriented. A firm which is stakeholder-oriented focuses on the need of their stakeholder such as employees, customers, society and others who have a direct economic link to the firm (Habil, n.d.). Businesses that are socially responsible will avoid actions that may cause detrimental to stakeholders. They have greater concern on stakeholder well –being.