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Costco and Walmart Values 小omparison

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While researching management behaviors at both Costco and Walmart I found myself characterizing both differently. Based on my research I would characterize Costco鈥檚 values as pluralist. With Fox鈥檚 idea of pluralism, there is a balance found between 鈥渆mployer and employee interest鈥 (History and Values, 2018), while seeking to provide 鈥渁 legal and policy framework that balances the competing interests and achieves both efficiency and equity鈥 (History and Values, 2018). Just as Walmart Costco provides low-cost products but one main difference that I did notice between the two is how much of its success is credited to its employees. Top leaders have attributed their financial success and growth to 鈥渢he organizational culture and the important role that employees play in the execution of its strategy鈥 (Pratap, 2017). Based on research there are many ways in how Costco correlates with pluralist values. Not only is starting pay $13 but for one Costco not only focuses on customer satisfaction but employee satisfaction as well. Costco focuses on employee development and training and works on understanding their employee鈥檚 limits and not pushing they are pushing their employees to do more than they know they can handle. Costco also tends to promote from within. With this it is common to 鈥減eople at Costco who have been working there for more than ten years鈥 (Pratap, 2017); in fact, the turnover rate for employees who have worked at Costco for more than a year is around 5%. For companies that have higher turnover rates companies 鈥渟pend more on HR and earn less from their expenses鈥 (Pratap, 2017).

I characterized Walmart鈥檚 values as egoist. With the egoist model employers are interested in maximizing profit while employees are focused on utility-maximization (History and Values, 2018). For one the four major components of Walmart鈥檚 culture is striving for excellence, action with integrity, respect for individuals, and customer service (Lomboardo, 2017). No one in that model is there anything that mentions employees. This is unlike Costco who components include the focus on employee satisfaction. That shows that Costco somewhat values their employees more than Walmart. Walmart is known for providing low-cost product but only announced in 2018 that they were going to start making starting pay $11 while announcing that they will start to remove management positions in lower performing stores. They will be removing 鈥3,500 salaried co-managers and adding 1,700 lower-paid assistant store managers鈥 (Peterson, 2018).

This analysis did help me understand the different approaches taken by management at these two companies. It seems that Costco鈥檚 approach focuses on the employees first and because of that not only are employees satisfied but the customer is as well. There seem to be no faults in their current system. Walmart, however, seems to just focus on the profit and not its employees first. Raising starting pay is a good step but demoting many salaried managers seems backward to me and seems like they took that step to make up for the increased starting wage. Not saying that Walmart should take on the same values as Costco, but I think if they were they would see that employees would be more satisfied which in turn would make customers more satisfied.

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