(Tiểu luận) mid term reportcase costco

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAM -*** - MID-TERM REPORT CASE: COSTCO Subject : Organizational Behavior Group :1 Class : Advanced International Business 63A Supervisor : Assoc Prof, Dr Pham Thi Bich Ngoc Group Student Name : Vu Huy Binh - 11210971 Lai Manh Cuong - 11211199 Hoang Gia Minh - 11213802 Ngo Minh Quang - 11214997 Vo Hoang Tan - 11219209 [T pe here] HANOI, 11/2022 [Type here] Contents CHAPTER I ABOUT COSTCO COMPANY 1 General information .1 Vision Statement .1 Mission Statement Core values .1 Employee Alignment .1 Ranking & Achievements Locations Financial performance in recent years Costco Business Centers CHAPTER II COSTCO’S CASE SUMMARY CHAPTER III QUESTIONS ANSWERING .7 Question 3.1 How exactly does Costco’s low turnover rate help it in its battle against Walmart? Will any of those factors also help against Amazon? Question 3.2 What would a “perfect turnover rate” be for a company like Costco? Describe the consequences of a turnover rate that’s too low 10 Question 3.3 If you were in charge of human resources at Costco, would you retain the philosophy of sending rank-and-file employees to school rather than hiring business school graduates? Why or why not? 11 CHAPTER IV RELATED THEORIES 12 Job satisfaction .12 Diversity in organization .12 Organizational culture 13 Understand working team 14 Motivation 14 CHAPTER V LESSON FOR OURSELVES AND COMPANY 16 i Figures Figure 1: Survey results Figure 2: List of achievements since 2016 Figure 3: Financial performance in recent years Figure 4: The hierarchy of needs 17 ii CHAPTER I ABOUT COSTCO COMPANY General information Costco Wholesale Corporation, or Costco, is an American multinational corporation that operates a chain of wholesale clubs exclusively for members Vision Statement “A place where efficient buying and operating practices give members access to unmatched savings.” Mission Statement “To continually provide our members with quality goods and services at the lowest possible prices.” Core values “Obey the law, take care of our members, take care of our employees, and respect our suppliers.” Employee Alignment Costco's mission, vision & values motivate 81% of Costco employees Figure 1: Survey results Ranking & Achievements 201 The world’s largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine 201 Ranked #15 on the Fortune 500 rankings of the largest US corporations by total revenue 201 Ranked #14 on the Fortune 500 rankings of the largest US corporations by 202 total revenue The 5th largest retailer in the word 202 Ranked #11 on the Fortune 500 rankings of the largest US corporations by total revenue Figure 2: List of achievements since 2016 Locations 7.1 Total number: 839 warehouses worldwide (as of September 2022)  578 in the United States and Puerto Rico  107 in Canada  40 in Mexico  31 in Japan  29 in the United Kingdom  17 in Korea  14 in Taiwan  13 in Australia  in Spain  in France Document continues below Discover more Nguyên lý thống from: kê NLTK 2021 Đại học Kinh tế… 323 documents Go to course Bảng tra giá trị tới 14 hạn - IYWD Nguyên lý thống kê 100% (2) Thong-ke-kinh-te 131 thong-ke-trong-… Nguyên lý thống kê 100% (2) [NHÓM 5] BÀI TẬP 37 NHÓM HỒI QUY BỘI Nguyên lý thống kê 100% (1) Những chiến dịch thu hút khách hàng… Nguyên lý thống kê 100% (1) Giáo trình nguyên Lý 135 Thống Kê -1 Nguyên lý thống kê 15 KTĐT 60C - Công  in China  in Iceland  in New Zealand 100% (1)  in Sweden văn đề nghị công… Nguyên lý thống kê 100% (1) 7.2 Characteristics of warehouses  Similar to the company’s domestic locations: identical layout, signage, and parking lot markings  Menus in the food court are tailored to international tastes: o Meat pies in Australia o Poutine in Canada o Seafood-topped pizza in Asian locations; pastor taco-topped pizza in Mexico o Clam chowder in Japan, South Korea, and Taiwan o Plokkfiskur in Iceland o Jacket potatoes in the UK o Self-service gasoline stations in a number of its U.S, Canada, Australia, Japan, UK, Spain, Mexico, Taiwan, and Iceland locations  The merchandise availability at international warehouses is mixed and adjusted to fit local tastes, offering American and local products Financial performance in recent years Year Revenue Net income Price per Share Warehouses Employees Ref(s) in mil USD$ in mil USD$ in USD$ (year end)[68] 201 141,576 3,134 203.71 768 245,000 [38] 152,703 3,659 293.92 782 254,000 [40] 166,761 4,002 376.78 795 273,000 [41] 195,929 5,007 567.70 815 288,000 [42] 226,954 5,844 838 304,000 [2] 201 202 202 202 Figure 3: Financial performance in recent years Costco Business Centers  Costco Business Centers are warehouses similar to regular Costco warehouses, and are open to all Costco members, regardless of membership type  Target customers: enterprises and small businesses  Products and Services: o Not offer most of the consumer-oriented services and products found at regular Costco warehouses, for example, clothing, jewelry, media, and tires o Provides printing professional services o Have large parking spaces for trucks o Can deliver large quantities of goods to businesses CHAPTER II COSTCO’S CASE SUMMARY Costco confronts challenges from two separate sides as it attempts to expand on its success:  The first comes from Walmart, the only US retailer larger than Costco Employees at Costco are paid 20.89 dollars per hour, whereas those at Walmart are paid 12.67 dollars per hour 88% of Costco's employees have companysponsored health insurance, while Walmart is only half as much Fifteen per cent of employees at Costco belong to the International Brotherhood of Teamsters, but Walmart actively discourages unionization However, Walmart has drawn criticism for cutting staff from 343 employees per store to 301 over the past five years  The rise of Amazon-Costco's second competitor has signaled a decline for several retailers as its business model is partly based on online ordering However, Costco has been able to hold its own for three reasons First, Costco receives more discounts from suppliers, which allows them to provide goods at lower prices than Amazon Secondly, groceries comprise a large portion of Costco's business; a field Amazon has yet to conquer Third, Costco does have at least some online presence, with its website being the 17th most popular retail site in the United States The different threats Walmart and Amazon present to Costco have led to an organizational commitment dilemma With a turnover rate of 5%, Costco has a cost and stability advantage over its traditional rivals On the other hand, that retention restricts the innovative ideas that outsiders can offer the company Costco will not recruit recent grads from business schools (instead opting to send rank-and-file employees to school) Jim Sinegal, the 77-year-old CEO who recently retired, still serves as a consultant CHAPTER III QUESTIONS ANSWERING Question 3.1 How exactly does Costco’s low turnover rate help it in its battle against Walmart? Will any of those factors also help against Amazon? One of the great reasons Costco competes with other renowned organizations is the low turnover rate More than other businesses, Costco depends on the renewal of customer membership; thus, providing customers with excellent services and products is crucial The company must give employees a lovely and comfortable work environment if turnover is under 5% Comparing Costco to Walmart, the low turnover rate often benefits Costco in various ways First, by paying more excellent compensation, Costco will attract more applicants, giving them a larger pool to choose prospects and workers As previously indicated, Costco staff make $20.89 per hour, whereas Walmart employees make $12.67 Additionally, the higher remuneration will entice workers to stick around and give the company more time Second, the low turnover rate would strengthen employee commitment In order to maintain a position in the company, employees must grasp the importance of "working hard" to enhance their performance Customers eventually become devoted by staying with the business rather than switching due to the service offered by the staff Third, long-term employees become accustomed to their jobs and work more effectively the better they treat their clients Long-term employment with the organization results in a stable labour base that helps it run more efficiently Long-term employees will have a wealth of information and expertise that will make their jobs more manageable, and they will also be more able to assist consumers Fourth, it will be easier to hire and train new employees when there are numerous long-term employees, saving time and money for each employee Fifth, if employees work for a company for a long time, they will come to know the clients, and sometimes buyers will buy products because they are familiar with reputable vendors Last but not least, more knowledgeable and motivated employees will be able to provide more superior customer care, which will generally broaden the base Based on the above-listed variables, Costco can retain its customers and staff more thanks to a lower turnover rate Costco's low turnover rate (just 5%) indicates that it does not employ a sizable workforce As a result, employees are less likely to leave the company and have greater faith in the HR department, executives, and the business Long-term employees and pay are not necessary when evaluating the company's capacity to compete with Amazon Wage may become advantageous, but what matters most is considering the internet market, what is being sold, and the availability, cost, and worth of the item in question The convenience of not having to leave one's house has allowed the online market to continue operating Amazon can thus continue to compete with Costco, even if not on the same terms as it did with Walmart, depending on the products offered and their value However, Amazon is different because it uses less physical effort to give the service to its clients People like to visit stores where they can examine more information about products before purchasing them, such as the expiration date and designs Additionally, Costco has an advantage over Amazon for the same reasons listed above (Costco receives more discounts from suppliers -> lower prices than Amazon; Costco’s business revolves around groceries—a market that Amazon has yet to crack, Costco's website is the 17th most popular retail site in the United State -> has an online presence) However, it was improbable that Amazon would also benefit from the same edge Young technical graduates make up a sizable portion of Amazon's staff, supporting the company's operations as it provides services online Although Walmart is a giant corporation than Costco, the latter has undoubtedly benefited from having a workforce with more expertise and providing better services thanks to higher salaries, health insurance, and other benefits Question 3.2 What would a “perfect turnover rate” be for a company like Costco? Describe the consequences of a turnover rate that’s too low The "perfect turnover rate" would be 0% in an ideal world However, this is improbable and impossible, particularly for a firm the size of Costco In terms of employees, the "ideal turnover rate" would also be 0-1%; nevertheless, the present figure is 5% Even though having a low turnover rate has many advantages, it also has drawbacks The absence of new hires and, consequently, fresh ideas within the organization would be one example of these implications Another illustration is the risk of not having workers qualified to take over as executives once they have finished their work with the organization The corporation has become quite inbred, according to John Matthews, vice-president of human resources at Costco, confirming the problems that result from retaining members with the company for an excessive amount of time and failing to bring in new personnel and, consequently, fresh ideas A meagre turnover rate may prevent the company from responding quickly because the competitors may not provide accurate information Some former employees of other businesses (Walmart and Amazon) may work for Costco They can also provide fresh concepts and expose the shady practices of their former employer The average age of the personnel at Costco is substantially greater because it has been primarily kept throughout time Because they are still learning, the newest technology and internet retail may cause them anxiety Question 3.3 If you were in charge of human resources at Costco, would you retain the philosophy of sending rank-and-file employees to school rather than hiring business school graduates? Why or why not? To compete with other businesses and get successful, the company should choose two ways of strengthening the human resource We think Costco should actively use both of its resources—hiring business students and sending rank-and-file employees to school —to stay competitive Sending insiders to colleges and hiring students from business schools are both wise moves, which keep the two primary sources of new ideas and workers in place and enable a "step-up" compared to the rivals By sending staff members to business school, it upholds the philosophy that Costco has adopted and has been successful with Employing business students expands the pool of potential ideas and workers for the workplace Keeping both helps Costco develop a more desirable and employee-driven workplace 10 CHAPTER IV RELATED THEORIES Job satisfaction The average wage for retail workers in the USA is $10 per hour, ranking among the lowest in the world Because they rarely obtain full benefits, employers frequently refer to them as "labour consumption" (turnover rate up to 65 per cent) Contrarily, Costco treats its employees better because they appreciate the economic worth of employee pleasure A company will benefit from having contented workers who are more committed, effective, and likely to stick around Because they have attractive compensation and a more focused, comfortable work environment, Costco employees are content and confident in their jobs (good wages and benefits) They are prepared to put in extra hours to reach the sales goal when necessary As a result, Costco gives employees a salary to help them thrive rather than using labour in the "new one in, old one out" approach Thus, by using the PRIDE system, firms can increase employee satisfaction at work:  Create a pleasant work environment  Reward and recognize achievement  Participate in and boost employee engagement  Develop the abilities and potential of the workforce  Assess and gauge job satisfaction Diversity in organization As was already said, Costco has a low turnover rate, which could work against it A low turnover rate may make it difficult for the business to obtain accurate information This characteristic restricts the innovative ideas that outsiders can offer a business 11 Diverse workforces provide companies with a competitive edge and help them perform better This strategy can encourage innovation, boost creativity, and aid business growth Costco must therefore find alternative ways to diversify its staff 12 Organizational culture The second-largest retailer in the world is Costco Wholesale Corporation This degree of success is partly due to the organizational culture of the company, particularly in terms of employee morale, contentment, and productivity The following describe the organizational culture of Costco:  A shared commitment to excellence: The Company feels that "good enough" is insufficient Due to this aspect of the organizational culture, Costco is able to drive employees to provide consumers with high-quality service  Positivity: The corporate culture at Costco Wholesale places a strong emphasis on politeness and kindness This aspect of Costco's corporate culture helps to boost employee satisfaction  High energy and quick tempo: Workers are inspired to maintain top output  Service orientation: Costco promotes its staff' interaction with consumers through this trait systematically and profitably  Teamwork: This organizational culture trait of the corporation uses the unity of teams to maximize performance Employees achieve the flexibility that allows Costco to respond to variances in client preferences through teamwork Costco uses its corporate culture to raise customer happiness and employee morale The positive attitude that Costco's organizational culture fosters is also correlated with the strength of its human resources It is anticipated that Costco would maintain the same organizational culture that has enabled the business to compete successfully against Walmart and other formidable rivals 13 Understand working team Why is a team vital?  Teams can achieve feats an individual could never accomplish  Teams are flexible and responsive to changing events  Employees can quickly assemble, deploy, refocus, and disband  The team is an effective means to democratize organizations Increase employee involvement  The team introduces a collaborative mindset Motivation Figure 4: The hierarchy of needs 14 Costco pays its employees an exceptionally high rate of $20.89 per hour compared to other stores, whereas Walmart pays only $12.67 The majority of Costco employees are entitled to insurance provided by the business Higher-income indicates they need money for necessities like clothing, water, and physiological requirements High wages translate into high output Higher salaries and the purchase of insurance imply that they will require safety needs, be healthy, and effectively contribute to the work Employee friendships and community are cultivated and strengthened when turnover is minimal Employees arrive at work feeling loved and included by their coworkers The result for Costco is a highly motivated team However, the thing that keeps customers returning and members renewing their memberships is a consistently positive purchasing experience Costco outperforms its retail competitors' thanks to the highly paid content staff 15 CHAPTER V LESSON FOR OURSELVES AND COMPANY As seen from the case, we realize that companies appreciate talented workers working for them in a competitive environment like a retail business Costco Company has two more significant competitors However, with the low-turnover rate strategy, Costco can be a formidable opponent in the market That is, keeping the skilled staffs contribute to Costco's several advantages to stand on hence, as a student, if you want to get hired in a high-monthly payment job, dynamic environment, or so on, you had better your best right now, when you are still at university Learn as much as possible: school activities, get vital certificates and have jobs would be everything you need to become a more fabulous you when being a postgraduate We tell you what: as a company, a retailer or a wholesaler, if you want a stable increase in profit, you should retain a "perfect turnover rate" for your company With all the benefits mentioned earlier, we believe you have learnt something and will it now 16