Leadership Strategies regarding Costco Company - Essay Example

? Costco Case Study on Leadership Strategies Contents Contents 2 Introduction 3 Flexible Leadership Theory 3 Application of Flexible Leadership in Costco’s Operations 4 The CEO’s Role in Costco regarding the Implementation of Flexible Leadership 5 References 7 Introduction Costco operates as a wholesale merchandise corporation having a large network of warehouses spread along different regions in the European and Asian markets. The company earns competitive advantage in conducting sales of both branded and private label products at highly competitive prices across the different global regions (Datamonitor, 2010, p.4). The paper in this connection endeavors to understand the pattern of leadership followed by the Chief Executive Officer of the company to gain the right competency in the international market. Flexible Leadership Theory The flexible leadership theory can be regarded as a strategic theory on human resources where the human resource or the organizational manager tends to take human resource decisions based on the current situation and also on the productive and performance ability of the firm. Further the human resource decisions are also carried out to help foster and enhance the parameters of business innovation to help the firm adapt itself to the competing business environment. Thus a flexible manager works for strategizing the human resource decisions to help the firm gain on productivity and thereby on revenue. Henceforth the flexible leadership theory can be observed as an effective combination of different theories pertaining to leadership styles, organizational management, strategic management theories and other human resource management processes. The organizational managers in this role are required to identify the changing demand scenario of the different stakeholders. Accordingly the managers operating based on flexible leadership model need to modify the performance and productivity parameters in the organization through promoting a different work culture based on active teamwork and innovation thus helping in enhancing the competitive position of the organization. Thus the model for flexible leadership theory holds that effective organizational performance is evaluated based on the performance parameters of the concern both in regards to time and also on the basis of increase in the revenue margins and market shares. The performance parameters are interconnected based on the flexible leadership model to the human resources and innovation capabilities of the firm based on different situations tom render all round growth. This model thereby tends to gain a tradeoff between the different emerging situations and the performance and productive capability of the firm to help in meeting the changing needs of the different stakeholders and also in enhancing the productivity parameters. Henceforth the flexible leadership theory can also be regarded as a situational leadership model that helps the company to effectively adapt to the specific situations emerging in the external environment (Yukl and Lepsonger, n.d., p.2). . Application of Flexible Leadership in Costco’s Operations The paper would now focus on analyzing the potential to which Costco tends to operate based on the flexible leadership style as evaluated above. Firstly the company is found to operate based on the set up of large number of warehouses in the international market whereby it tends to render products to the consumers at seemingly affordable prices. This strategy of the company reflects that the organization largely follows the flexible leadership approach in meeting the growing needs of the consumers based in international regions. Further this practice also helps the company in enhancing on the dimensions of consumer loyalty. Secondly the company also works based on a centralized decision making approach such that the people working in the different warehouses and retail outlets based in international markets are tightly connected. This process helps in enhancing the administration potential of the concern in regards to controlling the performance and decision making activities of the people based along international regions to help drive business productivity. Thirdly the company also reflects conducting large amount of market research activities in the international markets to gain potential insight into the changing demand scenario and adjusts its performance parameters accordingly. The management of the company focuses on setting up right strategies to enter the different international markets bearing different characteristics. One of the effective penetrating strategies carried out by the company in regards to the international markets is setting of low price standards for the products produced. This helps the company in gaining a larger market share in the potential markets. However the company when evaluated based on the flexible leadership theory is found to suffer from a serious limitation. It is observed that Costco tends to produce products for the international markets which largely suffer owing to limited assortments. Compared to other potential competitors it is found that the product varieties of Costco are quite less in number that tends to limit the product options presented to the international consumers. Thus the company to fully reflect flexible leadership style needs to work on enhancing on the product assortments based on the different categories. The CEO’s Role in Costco regarding the Implementation of Flexible Leadership The Chief Executive Officer of the company is considered as the main pivot in carrying out the flexible leadership program in a particular business organization. The Chief Executive Officer of a company is required to have a proper knowledge of the existing organizational resources and also on the capability and potential of the human resource base. Further the Chief Executive Officer is also required to possess a visionary mindset in effectively understanding the market demands and thereby formulating the product and service offerings accordingly (Yukl, 2007, p.399). Jim Sinegal in this context reflects both the adaptability of innovation in regards to the product and service offerings to the consumers and also in possessing the right vision of the current situation of the different target markets. The Chief Executive Officer of the company through the website of Costco tended to offer a floral package to the consumers meant for wedding and other special occasions. Similarly, Sinegal also reflected having a visionary understanding of the factors meant for the decline in the sales in western regions like California and Los Angeles. The Chief Executive Officer also focuses on enhancing on the quality aspects of the product and service to help in meeting the demands of the consumers and also in enhancing the private brand image of the company. Moreover Sinegal also focuses on meeting the enhanced needs of the employees through creation of a health insurance program. Though the creation of the program signified an increase in the costs yet it helped the company on enhancing the loyalty parameter of the employees. References Datamonitor. (2010). Costco Wholesale Corporation. [Pdf]. Retrieved on February 10, 2012 from:http://favormall.net/clientimages/38996/retailwholeleadcomp-costcowholesalecorp.pdf Yukl, G. & Lepsinger, R. (2002) Why Flexible Adaptive Leadership is Essential for Organizational Effectiveness. University at Albany. [Doc]. Retrieved on February 10, 2012 from: http://www.oks.hio.no/ou/fagseminar/artikler/Yukl-Lepsinger.doc. Yukl, G. (2007). Leadership in Organizations. Pearson Education India. Read More