Costco Wholesale’s Organizational Culture Characteristics

Costco Wholesale Corporation organizational culture characteristics case study and analysis
The food court of Costco in Overland Park, Kansas. Costco Wholesale Corporation’s organizational culture supports employee morale and customer satisfaction. (Photo: Public Domain)

Costco Wholesale Corporation is the second biggest retailer in the world. This level of success is partly attributed to the effects of the company’s organizational culture. A firm’s organizational culture establishes the values, habits and traditions among employees. Costco’s organizational culture enables the company to satisfy consumers through employees’ excellence in service. As the largest membership warehouse club chain in the United States, Costco uses its corporate culture to optimize employee morale and customer satisfaction. It is expectable that Costco will continue growing with the same organizational culture that has helped the company withstand strong competitors like Walmart.

Costco Wholesale Corporation’s organizational culture reflects the company’s commitment to excellent service. The strength of its human resources are also linked to the positive attitude promoted through Costco’s organizational culture.

Features of Costco Wholesale’s Organizational Culture

Costco’s organizational culture is a major success factor for the business, especially by way of employee morale, satisfaction and performance. The following are the main characteristics of Costco’s organizational culture:

  1. Common goal of excellence
  2. Positive attitude
  3. High energy and fast pace
  4. Service orientation
  5. Teamwork

Common goal of excellence. Costco Wholesale’s organizational culture focuses on excellence in performance. The company believes that good enough is not enough. This characteristic of the organizational culture allows Costco to push its employees further to achieve high quality service to satisfy customers. The focus on excellence also creates a sense of direction among workers in terms of their personal and career development.

Positive attitude. Courteousness and friendliness are emphasized in Costco Wholesale’s organizational culture. The company believes that these behaviors are important in attracting more customers to its warehouses/stores. This feature of Costco’s organizational culture contributes to employee morale.

High energy and fast pace. Efficiency is also included in Costco Wholesale Corporation’s organizational culture. Through high energy and a fast pace, employees are motivated to maintain optimal productivity. This characteristic of Costco’s organizational culture also contributes to the energetic buzz that helps satisfy customers based on speed and efficiency of service.

Service orientation. Service orientation is a typically feature in the organizational culture of retail firms like Costco. The emphasis on service helps align workers to the business goal of providing effective retail service. Costco also uses this service-oriented characteristic to encourage employees to interact with customers in a productive and profitable way, such as by promoting certain products to customers on the warehouse floor.

Teamwork. Costco facilities use work teams. This characteristic of the company’s organizational culture maximizes performance by utilizing the synergy of teams. Through teamwork, employees achieve flexibility that enables Costco to address variations in customer preferences. These work teams also enable the company to facilitate camaraderie among its employees.

Costco Wholesale’s Organizational Culture: Implications

The organizational culture of Costco Wholesale Corporation has worked through the years, indicating its suitability to the business. However, this organizational culture is relatively high-maintenance compared to the organizational culture of other firms, especially Walmart. Nonetheless, the characteristics of excellence, high energy and fast pace are sustainable because Costco has one of the best compensation packages in the industry.

References
  • Barney, J. B. (1986). Organizational culture: can it be a source of sustained competitive advantage? Academy of Management Review11(3), 656-665.
  • Cameron, K. S., & Quinn, R. E. (2005). Diagnosing and changing organizational culture: Based on the competing values framework. John Wiley & Sons.
  • Costco Wholesale Corporation (2015). About Us.
  • Costco Wholesale Corporation (2015). Costco Careers.
  • O’Reilly, C. A., Chatman, J., & Caldwell, D. F. (1991). People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of management journal34(3), 487-516.
  • Schein, E. H. (2010). Organizational culture and leadership (Vol. 2). John Wiley & Sons.
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