Organizational Behaviour Project Report: Costco Case Study

This report provides an in-depth analysis of Costco's organizational behaviour, examining key concepts such as job satisfaction, change management, conflict management, and leadership styles. The report begins with an executive summary, followed by company information, a background of Costco, and a SWOT analysis to understand the company's strengths, weaknesses, opportunities, and threats. The core of the report focuses on four key OB concepts: job satisfaction, change management, managing conflicts, and contemporary leadership roles. Each concept is analyzed in the context of Costco, with alternative approaches and recommendations for improvement. The analysis includes an examination of how Costco fosters employee satisfaction, manages organizational changes, and handles conflicts within the workplace. The report concludes with specific recommendations based on the findings, aiming to enhance Costco's overall organizational effectiveness and leadership practices. References are provided at the end.

Running Head: OB
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Costco
ORGANIZATIONAL BEHAVIOUR
4/12/2020

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Contents
Executive summary.........................................................................................................................2
Company information......................................................................................................................3
Background of the company............................................................................................................3
SWOT analysis................................................................................................................................3
4 OB concepts..................................................................................................................................5
Analysis and alternatives of four OB concepts................................................................................6
Recommendation.............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Executive summary
The organization chosen for the study of this assignment is a retailing company Costco which is
the second-largest company in the world after Wal-Mart. The company was founded on July 12,
1976, and has around 600 stores in the USA and Canada (Costco Company Limited, 2019). The
company has several employees and is also dealing with the customers so to study this company
would be quite interesting. In the retailing industry, there is very hard competition as there is a
number of the employees so the scope of the project is wider. The concept of four OB has stated
in this report which is related to job satisfaction, change management, managing conflicts and
the use of contemporary leadership. It was found through in the interview that employees are
satisfied with the company as they are getting the good average pay. The change management
and the leadership skills are also effective in the company but the major concern was related to
managing the conflicts (Langton, et al., 2016). As there were many employees so the conflicts
arise due to the change in the thoughts, norms, and values. So in this report, the recommendation
has given to solving the issues of managing the conflicts. The company needs to recognize the
points of agreement and disagreement to resolve the conflict of the organization.

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Company information
The organization which is selected for this report is Costco which is the retailing company in the
US. The company is the second biggest retailing company in the world and has many retail
stores in the USA and Canada. The company offers several products to the customers (Costco
Company Limited, 2019).
Background of the company
Costco Wholesale Corporation is a public retailer company that was founded on 12 July 1976.
The founder of the company was James Sinegal and Jeffrey Brotman. The headquarters of the
company is in Washington, United States. The company has its retailing story to many areas
such as Canada, the UK, the USA, Japan, Spain, Iceland, France, etc. The company also provides
the merchandise, cash and carry and warehouse club services (Arif, et al., 2017). It is an
American Multinational Corporation that is the second-largest retailer in the world and operates
the chain membership only of the warehouse clubs. The brand of this company has the private
label of “Kirkland Signature”. The company has high revenue and they are the largest retailer of
the prime beef, rotisserie chicken, organic foods and the wine.
SWOT analysis
Strength
The company Costco is a well-known company in the market that has many stores across Canada
and the United States. The company gives positive treatment to the employees and their selection
of private products is also good. The major benefit which the company has is that they offer
benefits to the employees and also maintains the average wage effective which helps in reducing
the employee turnover of the company (Hanaysha and Tahir, 2016). The company Costco
majorly focuses on the loyalty and retention of the customers which helps in making the
customers feel special. The company offers bulk products to its customers at the discounted rate
so it helps in increasing their market share. The company also focused on saving the environment
by maintaining business practices eco-friendly. The company also decreased its operation cost by
buying the products in bulk and helps to maintain a specific position in the market.

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Weakness
The company can offer a variety of products as they are the retailing store but they offer limited
products so they have the sad selection of the product. The biggest weakness is that they are
offering around 4000 products on the floors which is a very small section in comparison to the
Wal-Mart company (Weber and Camerer, 2013). The stores have limited presence as they are
located over 600 places only between Canada and the USA. The reputation of the company
Costco is hit by the product recalls and it affects the sales of the company. When the sales of the
company get impacted then it affects the reputation of the company and they feel not safe in the
competitive market (Lines, et al., 2017).
Opportunity
The world is becoming online so the company Costco has the opportunity to gather more
customers by offering them online services. People can do the shopping online through the
presence of eCommerce and it helps the company to build a strong community. The company
can even offer many products as they do not have to show than on the floor of the physical stores
and gathered the customers by offering discounted prices. Digital advertising is another
opportunity for the company which helps them in growing every day by attaining the many
customers through social media sites (Lyubovnikova, et al., 2017). With the help of digital
advertising, the company can reach too many customers and continue to open the new
warehouses for global expansion. Transportation is getting the advancement of the technology
and it helps the company it reducing its cots.
Threat
The company has the biggest threat related to the brand reputation as due to the product recall
the company has to bear the financial losses and their reputation in the market is also getting
damage. Costco is the retailing company so its reputation in terms of the products should be
higher but due to the outbreak of the E. coli toxin, many customers recalled the products from
the stores (Azeem and Akhtar, 2014). The security of the customers is a major threat that the
company has as they keep their records to a third-party cloud service but these details could be
spell doom and harm the company. Competition is the biggest threat which the company and the
major competitor of Costco are Wal-Mart, Amazon which is dealing with the largest retail

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products. The bad economies, exchange rates, and other political uncertainty also give a threat to
the performance of the company.
4 OB concepts
Job Satisfaction
OB tries to improve the job satisfaction level of the employees by providing them an effective
organizational culture and structure. Ob Helps in analyzing the perception and the feeling of the
employees towards the company whether it is positive or negative. The higher level of
productivity in the company can be attained if the job satisfaction level among the employees is
higher. The company can even satisfy their customers if the employees of the company are
satisfied (Spencer-McDaniel and Anthony, 2012). The job satisfaction level in the company can
be attained through job security, flexible working culture and a good relationship with the
superiors. There are several factors that affect the level of job satisfaction so OB helps in
evaluating those levels. The pas scale, working environment, fair policies, promotion,
appreciation, rewards, etc. are the key factors of job satisfaction in OB.
Change Management
Change management is an effective tool need in the organization to acquire the business
outcomes of the company by managing the people or convincing the employees for obtaining the
change. It is the tool that helps the individual to make more innovation and development by
adopting the new changes (Yee and Yazdanifard, 2015). Many people resist the change as they
do not want to go outside their comfort zone so this concept of OB helps the organization in
adopting those changes and helps in enhancing the productivity of the company. It is the
approach through which the individuals are shifted to the desired future state and helps in
generating new insight into the company.
Managing Conflict
It is the important concept of the OB in which the conflicts are managed by the company by
changing the organizational structure of the company. The conflicts arise between the team
members which create the enemy at the working place so this technique helps in solving the
problems by managing the conflicts (Thomas, et al., 2011). This concept of the OB helps in

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collaborating and compromising with the employees and helps in resolving the issues within
them. Managing conflicts also includes competing, accommodating with others and
compromising. At the working places, the conflicts arise due to the change in the values, norms,
beliefs, interests, needs, etc. so managing conflicts helps in increasing the positive aspects and
enhance the performance of the company.
Use of Contemporary Leadership Roles
There are several contemporary approaches to leadership in the OB such as servant leadership,
transformational leadership, contingent leadership, authentic leadership, etc. In OB
transformational leadership approach is used by the company in which the leader focuses on the
employee's goals and also motivates them to attain the vision of the company (Al-Haddad and
Kotnour, 2015). In transformational leadership also there are the four tools that help in building a
more effective relationship. With the help of contemporary leadership, the company increases its
performance by enhancing more on creativity and innovation and also achieves a higher level of
commitments.
Analysis and alternatives of four OB concepts
Analysis of job satisfaction
The job satisfaction is one of the important processes of the company as the job satisfaction is
used to motivate the employees. In Costco Company, job satisfaction is higher as it gives several
benefits to the employees. By acquiring the benefits of the employees, it improves job
satisfaction among them (Saeed, et al., 2014). The concept of job satisfaction is better for the
company to achieve high growth in the market. The Costco Company gives benefits to the
employees like health insurance, life insurance, employee discounts, and PTO policy. All these
benefits are good for improving job satisfaction among the employees. The company used
situational leadership to maintain job satisfaction and it has been identified that this job is a
stress-free job for the employees of the company.
Alternatives to job satisfaction
The alternatives to job satisfaction include the different process that improves job satisfaction in
the organization and that also motivate the employees towards the working process. The

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company chose the other leadership process to improve job satisfaction. The main alternative of
job satisfaction relates to the promotion of career development, job rotation and job enlargement
(Alvesson and Sveningsson, 2015). All these alternatives improve job satisfaction among the
employees of Costco Company. The company needs to focus on the long-term benefits to
improve job satisfaction and it automatically affects the overall organization properly. The
company needs to be realistic with their expectation so that the employee cannot feel the
workload on them and work with the proper motivation
Change management
Change management is one of the important processes in the organization as it manages the
overall changes that largely impact the business. The Costco Company makes several
standardized methods that help them in change management. Change management improves the
overall process of the business. Costco Company uses various methods to improve change
management (Ku, et al., 2015). The one aspect related to change management is to make
discipline in the administration of change. The company achieved all the outcomes of the
business by adopting proper change management. The Costco Company makes the proper
change management process to improve the overall business and this increases the motivation
among employees and also improves the thinking skills of the employees. The change related to
Costco is to manage the quality of services and many different processes.
Alternatives to change management
Although, the change management in Costco Company is better it is important to use some
alternatives for effective change management in the business. Some of the proper alternatives to
change management include incremental adjustments, cross-functional training, prototypes, trial
period and communication. These alternatives need to adopt by Costco for making change
management more effective and to achieve better results from the employees. By using the
alternatives, the organizational change becomes better and improves the overall aspects of the
business (Lord, et al., 2017). Communication is one of the best alternatives in change
management which gives the proper information to the employees regarding change so the
employees get well-known data related to the changes occurred in the business. Costco Company

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faces several changes like changes in product distribution, changes in service quality and
changes in the positioning process. All these aspects properly manage the business.
Managing conflict
The managing conflict is also one of the important concepts of the organization as the company
faces several conflicts in the business and these conflicts need to be properly managed by the
company for achieving better outcomes. The strategy of managing conflict of the Costco
Company is not better as they don’t have proper managers that can manage conflicts. The
conflict management ability is not proper in tee organization so it faces several challenges in the
business process (Iljins, et al., 2015). Conflict management includes several techniques that
decrease the negative effects of conflict and enhance the positive results in the business. But the
Costco Company lacks the proper information of techniques related to conflict management and
faces several challenges in business management. Costco's company is not enough able to
manage the conflicts properly.
Alternatives for managing conflict
There are several conflicts occurred in the organization which affects the overall process and
creates several negative outcomes for the business. Conflicts occurred in the process of human
interactions and Costco needs to manage employee problems for better satisfaction (Robertson
and Barling, 2013). There are several alternatives sued in managing conflict includes the
evaluation and understanding of the emotional responses of the people. The company needs to
adopt self-awareness is a key to manage conflicts that affect the various activities and functions
of the business. Costco Company needs to solve the issues from its roots.
The companies need to listen to everyone and solve their issues by the proper solutions. All these
solutions are too effective in the process and it improves the different process of the business.
These alternatives are much better for the organization and increase the capability among
employees to handle the conflicts (Lyubovnikova, et al., 2017). But the Costco Company not has
enough techniques to manage conflicts as they need to follow some of the recommendations
regarding conflict management.
Use of contemporary leadership roles

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The contemporary leadership is too important and effective in the overall organizations. These
roles of leadership improve the overall qualities of the leader and increase the better outcomes of
the company. The Costco Company follows the several contemporary approaches of leadership
to effectively lead the employees of the organization. The company includes transformational
leadership, servant leadership and authentic leadership to improve the different strategies of the
leadership in the company (Ku, et al., 2015). The contemporary role of the leader influences the
inspired people of the business and helps to achieve the overall objectives of the organization.
The Costco Company makes several differences in the community for improving better
contemporary leadership roles. These roles are too effective for the business as they guide the
employees towards the work and improve employee motivation in the company.
Alternatives in the use of contemporary leadership roles
There are several alternatives sued by the company to make contemporary leadership proper in
their business functions. The alternatives improve the use of contemporary leadership in the
process and it increases the overall benefits in the business. The alternatives to contemporary
leadership include quantum leadership, charismatic leadership, transactional leadership, and
transformational leadership. All these alternatives are needed to use by the Costco Company for
the better management process (Lord, et al., 2017). The company needs to use situational,
contingency and other leadership theories to make the process better. These roles of the
leadership are too effective in the environment and it helps the company to achieve all the
desired objectives of the business. The company gets several benefits by using these roles of
leadership and achieves the desired objectives for the business. Employee motivation is attained
by the company by using the contemporary leadership process.
Recommendation
The Costco Company has not managed the overall conflicts in the overall process of the
business. As the managing of conflicts is one of the important processes of the business the
several recommendations are used by the Costco Company to manage the overall organizational
conflicts (Bayarcelik and Afacan Fındıklı, 2016). These conflicts improve the overall process of
the business and it increases the overall aspects of the business objectives. The main
recommendations to manage the conflicts include:

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 The organizational leader must talk with the other person
 Listen carefully to reduce the conflicts
 The employees need to focus on the behavior, events, and personalities
 The company needs to recognize the points of agreement and disagreement
 The company need to develop a plan to work on each conflict
 The company needs to build on the success of the people.
 The company needs to develop a plan to work on each conflict
 The company needs to evaluate the process to manage conflicts.
Conclusion
From the above report, it is concluded that due to the increasing number of employees in the
company Costco there was the major issue of managing conflicts. Every employee has a
different opinion, beliefs, norms, culture, values, etc. so it becomes quite difficult for the
company to manage the conflicts. In this report, the four other concepts of the OB have also
explained that are job satisfaction, change management, managing conflicts and the use of
contemporary leadership. The recommendation has also given to resolve the issue related to the
conflicts between the employees due to the disagreement between the things.
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References
Al-Haddad, S., & Kotnour, T. (2015). Integrating the organizational change literature: a model
for successful change. Journal of organizational change management. Retrieved from:
https://www.semanticscholar.org/paper/Integrating-the-organizational-change-literature
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Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change
work in progress. Routledge. Retrieved from:
https://www.taylorfrancis.com/books/9781315688404
Arif, M., Zahid, S., Kashif, U., & Sindhu, M. I. (2017). Role of leader-member exchange
relationship in organizational change management: Mediating role of organizational
culture. International Journal of organizational leadership, 6, 32-41. Retrieved from:
https://www.researchgate.net/publication/322234082_Role_of_Leader-Member-
Exchange_Relation_on_Organization_Change_Management_Mediating_Role_of_Organi
zational_Culture
Azeem, S. M., & Akhtar, N. (2014). The influence of work life balance and job satisfaction on
organizational commitment of healthcare employees. International Journal of Human
Resource Studies, 4(2), 18. Retrieved from:
http://www.macrothink.org/journal/index.php/ijhrs/article/view/5667
Bayarcelik, E. B., & Afacan Fındıklı, M. (2016). The mediating effect of job satisfaction on the
relation between organizational justice perception and intention to leave. Retrieved from:
https://www.researchgate.net/publication/311357704_The_Mediating_Effect_of_Job_Sat
isfaction_on_the_Relation_Between_Organizational_Justice_Perception_and_Intention_t
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Costco Company Limited. (2019). Annual Report – Financial review [Annual Report]. Retrieved
from: https://investor.costco.com/static-files/05c62fe6-6c09-4e16-8d8b-5e456e5a0f7e
Hanaysha, J., & Tahir, P. R. (2016). Examining the effects of employee empowerment,
teamwork, and employee training on job satisfaction. Procedia-Social and Behavioral