Costco Case free essay sample

Costco Case Study Leadership and Management II Abstract In this paper you will read about how Costco uses effective leaders within its company to empower their employees and create a working environment that is enjoyable. This paper will aim to answer three questions: 1 . ) How does the flexible leadership theory apply to Costcos operations? 2. ) What is the CEOs role in all of this? 3. ) Can this work in your organization? If not, why? After reading the Costco Case Study found in Gary Yulks book entitled Leadership in Organizations (7th Ed. , positive thoughts about how leadership has emerged and a eeling of confidence became eminent. Leaders really can be effective leaders and run a very productive company as shown by Jim Sinegal who is CEO of Costco. His outlook on the company is very inspiring and motivating for those reading the case study. In looking for more information, another article by Gary Yukl came up in a search query entitled; how leaders influence organizational effec tiveness, from the Leadership Quarterly magazine. In this article he really breaks down into separate sections what his flexible leadership theory is really all about. While reading this rticle and relating back to the Costco case study, one can see a correlation between the way Jim Sinegal manages/leads and how Yukl describes his flexible leadership theory. In this article Gary Yukl (2008) outlines the flexible leadership theory as conceptualized primarily at the organizational level, and it includes four sets of variables: (1) organizational effectiveness, (2) performance determinants, (3) situational variables, and (4) leadership decisions and actions. He goes on in the article to explain the importance of each variable. He explains that effectiveness epends on three different primary performance determinants; (1) efficiency and process reliability, (2) human capital and (3) adaptation to the external environment (2008). The above mentioned is very important in relation to the Costco case study. Jim Sinegal the CEO of Costco uses the set of variables above to create a company that people wanted to work for. The funny thing is he used this set of variables without even knowing he was using them. In the case study Yukl (2010) states, He understands how important it is to have talented people working for a company, and e does many things to attract and retain them (2010). In the set of variables one of important in the success of his company and it shows. Yukl (2010) states that Costco is a company that has one of the most loyal and productive workforces in the retailing industry (2010). This is because they hire people (human capital) with Job skills, education and experience that can help progress the company even further. The flexible leadership theory also states that leadership actions and decisions is important. Sinegal also seems to think this is true as he ensures that decisions involve the entire store. Jim looks to get ideas from him employees at early morning meetings before the store opens. The managers lead a conversation about what can be done better, how to better their customer service and also they encourage any ideas on how to improve the store. This all helps Jim and his managers create the best possible atmosphere they can for their employees. In another article entitled Learn to Influence Others by Julie Britt (2010) she talks about how trust is a big factor in a leadership role. Julie Britt (2010) quotes Donna Dennis as to saying that trust arises from a leaders credibility, his belief in those he eads and his openness. Establish expatiations for your team and show consistency in your actions (2010). This is evident with Sinegal and his practices. In the case study it states that he had to increase the amount of premium that his employees had to pay for health insurance Sinegal took it in his best interest before he started to charge his employees more, to write a letter explaining to them why there was going to be an increase. His response from his employees, were letters of support. They trust that he is doing the right thing for his employees and he shows it by visiting ach store at least twice a year and remember most of managers names. Hes not just a CEO with a name, but hes a CEO with a name and face that truly cares about his people. One of the questions from above is what is the CEOs role in all of this? From reading the case study and other supporting material, his role is that he is an effective leader who cares about his company and his employees. He does everything in his power to ensure that his employees are taken care of and that their well beings are in his thoughts. Not only are his employees important to him, he also emonstrates a compassion for his customers. He had to make a decision that would save the company money, but he kept the best interest of the employee in mind and worked out a compromise that will benefit him and his employees. From what this case study says Jim Sinegal is a very good leader and an effective one at that. Nahavandi (2009) says that the common thread in all these examples of effectiveness is the focus on outcome. One way to take a broad view of effectiveness is to consider leaders effective when their group is successful in maintaining internal tability and external adaptability while achieving goals (2009). From the case study, Sinegal seems to have a level head on his shoulders. His outcomes are great milestones in which he and his employees work hard daily at achieving his goals. He seems to put a lot of effort into making sure his employees knows who he is, what he the best way to accomplish something, he works hard to ensure the outcome is beneficial for all parties involved. In looking over the case study as well as the additional material, this type of leadership style can work for the organization I work for. However, the organization that I work for is a big university, looking directly at my department alone would be more practical since I know more about the department as oppose to the entire university. Jim Sinegal values his employees and their opinion. He demonstrates this by having meetings each morning to see how they can do better and be better. This is a great idea because the employees dont have to wait a year till the annual meeting or use a suggestion box. At my office we have to wait until the annual retreat or until a new project presents itself. I think a monthly meeting like this would be a wonderful idea. As of right now, we have a weekly staff meeting where 3 of the 20 people talk all the time. It is not a very time efficient meeting; in fact its a big waste of time for most people. I do think that one thing our department has done in unison with Sinegal was they have yet to lay anyone off during the budget crisis. People here have been willing to give up lunch meetings, work phones and other perks to be able to keep their Jobs. These ideas came from our leadership people who value their employees such as Sinegal does. They are working with the leaders above to ensure that nobody is left by the waist side. Our managing director feels that everyone in his department is valuable and non-expendable. I think the way that Jim Sinegal manages is Just one way of getting the Job done. I do believe in several of his beliefs and reasons as to why he does things. However, I do believe there are different ways to get things done. This Just seems to be the best way for Sinegal to run his company and it seems that he gets a lot of respect from his subordinates in the end. Do I think this can work for other organizations as well, yes, hough I believe that is may not be the ideal way for everyone. Leadership comes in different shapes and sizes and there is no one way to be leader. As seen in several class discussions, there are many different types of leaders. From good to bad, to effective to ineffective its really up to the person who is the leader to decide how they are going to lead. Sinegal seems to be a very effective leader with several good qualities to brag about. He works for his employees and for his company to ensure that he is successful and his employees are successful as well.