ORGANIZATIONAL RELATIONSHIPS 8
Costcois among the largest retailers in the United States. On top of that,it has established other branches in several countries around theworld. Moreover, the company has over 720 warehouses in differentparts of the world. Despite the many competitors globally, the Costcohas managed to remain at the top of the competition game due to thelow pricing of its products. However, it is a requirement thatcustomers have to buy in bulk if they are to enjoy that benefit.Furthermore, its success does not come without the effectiveness ofits internal and external stakeholders. Costco has been in a positionto give a chance to every stakeholder, both internal and external, todetermine its success through effective involvement in establishinguseful and reasonable approaches to development that are evident inits current success.
Severalinternal stakeholders play a significant role in Costco through theirinterests or claims in the organization. The parties includeemployees, members who are also the customers, investors, and thecommunity.
Workersform an integral part of the internal stakeholders in anyorganization. In fact, they are categorized as the most importantparticipants in an entity that strives for success. One of theinterests that employees have in Costco is financial in nature.Consequently, they invest their time, knowledge, and experience withthe hope of acquiring compensation in return. In this case, they haveto ensure that the organization is on the right path of deliveringvalue to the shareholders to derive that benefit (Drori & Honig,2013). The value is mainly measured based on the profits attained byCostco.
Inaddition to the financial claim, there are other benefits thatemployees get from Costco. They include career development, healthbenefits, and reimbursement of money that is spent on the same. Theentity also extends care through initiatives to employees’ lovedones, such as children and the elderly. On the other hand, they havethe responsibility of developing strategies that will lead to thesuccess of the business. Most importantly, they play a role in theimplementation of those tactics.
Costcois a member-only business meaning that its customers are also theassociates of the group. In fact, they have several interests in theorganization. One of them is that they have a claim on the goods thatare sold in the warehouses. The goods have to be of good quality, andat the same time, there is a commitment to have the goods sold at lowprices. Therefore, they also expect that the prices of goods stockedat the warehouses will be affordable. In return, they have theresponsibility of buying the products if they meet the neededcriteria.
Theycommit to putting their money into the business for continuity. Theirinterest, therefore, is to get a return on their investment.Moreover, investors expect that Costco will grow so that they canreap the benefits of their venture. Additionally, they have theresponsibility of investing capital into the business to ensure thattheir interests will be achieved. Investors are also involved inchecking on the progress of the business and initiating correctiveactions where necessary (Drori & Honig, 2013). At the same time,they have the authority to call for changes in the operations ofCostco to ensure transformation. Some of the areas that they may callfor change include the strategy of the business and priority in theareas of investment.
Thecommunity is the environment in which the business operates. They areimportant in that they affect the perception of internal stakeholdersof the firm. One of their interests is the environment. They alsohold the business to ensure that it is giving back to the community.They have the obligation of identifying the areas that the companymay address, such as where to invest with regards to strengtheningtheir corporate social responsibility (Drori & Honig, 2013). Atthe same time, they also have the authority of demanding action inareas of interest particularly when the environment is concerned.
Costcorecognizes suppliers as partners who keep it on the going concernnature since they provide the required products for trading purposes.Likewise, they have an interest in establishing a market for theirgoods. Therefore, suppliers in Costco have to develop a productiverelationship with the company to enjoy continuous orders flow oftheir goods into the entity. Indeed, it is through a healthyrelationship that their interests in the company will be met andprofits will be high as a return. In this case, they have theresponsibility of ensuring that the business gets supplies in time atthe right prices.
Everybusiness needs funds for expansion or indemnity purposes meaning thatlenders play a part in the development of any organization. Creditorsfinance Costco by extending credit facilities. In some instances,they may be the suppliers in the business. Their interest in thecompany is to ensure that there smooth running of operations withoutdelays (Drori & Honig, 2013). Without that, it can be difficultfor the business to settle its debts. Similarly, creditors have theresponsibility of endowing Costco with the credit facility it needspromptly. Also, they have the authority to demand payment when it isdue. At the same time, they can deny the business credit when theyfeel that it is not in a position to meet its financial obligations.
Thegovernment has several interests in Costco since the entity has tofollow all the rules outlined in various codes. The first claim ofthe national authorities is to collect taxes when they are due.Furthermore, the government has the role of providing licenses to thecompany in case it wishes to carry out projects for expansion.National authorities also have the duty of setting laws to guide thedaily operations of Costco. At the same time, there is theresponsibility of ensuring that the business does not exploitcustomers.
Correspondingly,the government protects the enterprise from the unhealthy competitionthat can emerge in its operational market. The government has theauthority to determine the way the business operates (Drori &Honig, 2013). For example, there are some goods, which it may berestricted from selling to consumers. The national administrationalso has an obligation to determine the employment policy Costco. Inthis case, while fulfilling that role, it ensures that there is nodiscrimination in the hiring process. Moreover, representation ofminority groups is a requirement that ought to be emphasized by thegovernment.
Segmentsand Trends in the Business
Varioussections make up the business environment, which includestechnological, cultural, legal, and economic divisions. In this case,the technical sector needs effective and efficient management toensure that Costco is in line with any advancements in the industry.On another note, the organizational culture needs to be aligned withbusiness strategies to ensure that diversity is considered fordevelopment purposes (Drori & Honig, 2013). The legal aspect isalso vital since it keeps on changing over time with new laws beingestablished every day to ensure smooth operations in businesses.Moreover, the economic segment is important in the sense that Costcoshould pay attention to prevailing inflation rates among otheraspects.
Furthermore,with regards to trends, the retail business is changing fast to suitthe needs of the consumer. People have tight schedules and littletime to do shopping. At the same time, there are numeroustechnological changes, which have taken over operations in the retailindustry. On that note, retailers are taking advantage of theadvances in technology to avail their goods to their customers attheir doorsteps (Drori & Honig, 2013). In fact, through onlineshopping, customers can shop and pay for the goods they need. Theythen agree with the retailer when the goods can be delivered.
Effectson the Business
Oneof the major effects on the firm is that they are increasingcompetition. More entrants are getting into the business to exploitthis new trend. At the same time, the investment required is smallsince it is not necessary to have large warehouses and stores wherecustomers can get the goods. In fact, it is possible for a retailerto buy the goods once a customer orders them. The implication is thatit will eat into the market share of the existing retailers if theydo not adopt the changes.
Oneof the recommendations to the business is that it should embraceinternet marketing. The Internet has the potential to increase itsfortunes considering that it already has a good base of customers(Drori & Honig, 2013). Besides that, it is advisable that thecompany increases the variety of goods that it stocks in itswarehouses. In that case, Costco will ensure that it does not losecustomers to its competitors who stock almost everything that acustomer may need. Furthermore, the business is a member-only entitymeaning that it can find it hard to acquire new customers fromnonmembers who would want to shop at their warehouses. However, ithas the potential to increase the number of customers by openingitself for all clients to access its products.
Allin all, the business environment is quite a dynamic one and has manystakeholders, both internal and external. That being said, how theyrelate and take their responsibility determines the success ofCostco, which is a well-established retailer. The strategy that thebusiness adopts must put into account the roles of the stakeholdersand their responsibilities. On the whole, it must be ready to takethe changes that are happening in its environment.
Drori,I., & Honig, B. (2013). A process model of internal and externallegitimacy. OrganizationStudies, 34(3),345-376.