The Costco Model

Costco is often cited as one of the world$$s most ethical companies. It has been called a $$testimony to ethical capitalism$$ in large part due to its company practices and treatment of employees. Costco maintains a company code of ethics which states, $$The continued success of our company depends on how well each of Costco$$s employees adheres to the high standards mandated by our Code of Ethics...By always choosing to do the right thing, you will build your own self$-$esteem, increase your chances for success and make Costco more successful, too.$$

In debates over minimum wage in the United States, many commentators see Costco as an example of how higher wages can yield greater company success, often pointing to competitors such as Walmart and Target as examples that fall short in providing for their employees. Other commentators do not see Costco$$s model as being easily replicable for different types of businesses, citing wages as only one of many factors to consider in companies$$ best practices.Costco tends to pay around $40\%$ more and provides more comprehensive health and retirement benefits than Walmart and Target, saving large amounts in employee turnover costs. The company resists layoffs, invests in training its employees, and grants them substantial autonomy to solve problems. U$.$S$.$ Secretary of Labor Thomas Perez stated, $$And the remarkable loyalty that $[$employees$]$ have to $[$Costco cofounder Jim Sinegal$]$ is a function of the fact that he categorically rejects the notion that, $$I either take care of my shareholders or my workers.$$ That is a false choice.$$ While few disagree with the benefits of fair treatment of employees, some commentators credit the success of Costco to its broader business model that favors higher productivity, not employee satisfaction. Columnist and economist Megan McArdle explains, $$A typical Costco store has around $4,000$ SKUs $[$stock keeping units$],$ most of which are stacked on pallets so that you can be your own stockboy. A Walmart has $140,000$ SKUs, which have to be tediously sorted, replaced on shelves, reordered, delivered, and so forth. People tend to radically underestimate the costs imposed by complexity because the management problems do not simply add up; they multiply.$$ Furthermore, McArdle notes that Costco mainly serves as a grocer rather than a department store and caters to a generally affluent customer base in suburban areas.

After review & reflection, please answer the following:

What do you think are the most important practices for a retail company to pursue to foster an ethical environment for workers and consumers? Why?

Is a company that does not follow the Costco model a $$bad$$ company? Explain.

Does Costco follow the conscious capitalism model $($what is conscious capitalism? What is the ethical mindset of conscious capitalism?$)$

Compare the ethical model of Costco with Bombas, Patagonia, Whole Foods & Starbucks. $($to what are they committed to doing?$)$