Costco's Managerial Functions - Term Paper Example

Costcos Management Style and How the Business Operates Introduction Managerial functions refer to a set of practices that can enable the organizations to successfully accomplish their predetermined business targets. The organizations of the present business world tend to highly focus on developing as well as designing effective and well-built managerial functions that can lead them towards sustaining in this competitive financial market. The managerial functions are regarded as the primary factors of an organization that incorporates major set of practices like planning, organizing, leading as well as controlling that can lead them towards accomplishing their expected business goals. With due regard to the managerial functions and their necessities within an organization, the primary objective of this paper is to demonstrate the fundamental roles and functions of managerial functions that are practiced by Costco Wholesale Corporation (Costco) in the global retail industry (Lewis, Goodman, Fandt & Michlitsch, 2007). Costco is globally well-known for its extensive operations of retailing broad assortment of products for different group of customers across the globe. The organization principally involves a membership warehouse facility that is dedicated to provide extensive collection of quality based merchandise to its global customers in a best possible price. Currently, Costco can be observed in more than hundreds of global locations with a wider range of merchandise, convenient specialty departments as well as elite membership services serving different group of global customers (Costco Wholesale Corporation, 2013). Therefore, the main purpose of this report is to reveal the managerial functions including planning, organizing, leading as well as controlling performances of Costco in its global business operations. Managerial Functions in Costco The managerial functions are regarded as the pivotal factors that significantly direct an organization to accomplish its broad array of business practices. According to the rapid development of the global business environment, the organizations seek to achieve better control of its range of activities to remain competitive. With this regard, it is highly essential for an organization to incorporate an effective set of managerial functions for the purpose of strengthening and developing its operational as well as managerial capabilities through designing effective set of planning, organizing, leading as well as controlling functions (Costco Wholesale Corporation, 2012). This can be better understood with the help of the following pictorial illustration. Source: (Daft & Lane, 2009) In relation to the business operations of Costco, it has been observed that the organization practices an effective set of managerial functions that enable the company to conveniently perform its wide range of activities by a considerable level. Planning Planning can be considered as the initial and major aspect of the managerial functions that perform by a particular organization. The phase highly involves unending course of functions that are set by the top hierarchical members of a specific organization (Lewis, Goodman, Fandt & Michlitsch, 2007). In relation to the present managerial functions of Costco, it can be identified that the top hierarchical members of the organization tends to make effective decisions in order to attain its expected business targets. In this regard, the decisions include setting any predetermined business goal, procedures along with policies and other plans to deliberately provide quality products or services to its potential customers. Moreover, the planning functions of the Costco also incorporate developing functional strategies and effective action plans that facilitates the organization to attract the customers by a greater extent (Costco Wholesale Corporation, 2011). In addition, the planning function of the organization also engages different marketing and promotional functions concerning warehouse opening, direct mailing to the new members along with direct marketing to the existing members of the organization (Costco Wholesale Corporation, 2012). It has been viewed that the planning functions that are executed in the Costco have been emphasizing on setting business objectives, short or long term goals along with determining the business policies that are to be followed with organizational values and principles. In relation to the present planning function, it has been apparently observed that the organization is significantly focusing on its predetermined steps that ensure to provide adequate support in terms of improving its performance in its respective industry. Therefore, the company has remained much committed towards executing different effective operational functions that need to be followed by Costco in its future endeavors. In this similar concern, it has been viewed that the future initiatives of the company would be focused on promoting technology investment, packaging innovation, waste management along with other environmental sustainability initiatives among others (Costco Wholesale Corporation, 2012). Organizing The aspect of organizing is also viewed to be an important and crucial phase of managerial functions that consists different aspects in order to manage the overall activities performed within an organization. An effective organizing process can significantly provide ample support to different organizations towards accomplishing their respective desired goals at large. The organizing phase considerably engages the structure of the organization, division of the workforce and responsibility of utilizing organizational resources (Lewis, Goodman, Fandt & Michlitsch, 2007). In relation to Costco, it has been viewed that the organization significantly involves an effective organizing process that focuses upon effectively managing its broad assortment. The organization functions of Costco constitute different managerial as well operational activities that are comparatively different as per their nature and role. In this regard, the organizing functions in Costco engage range of operational activities that are performed by its business managers and supervisors. With this regard, the management of the organization tends to demarcate its range of business activities to the different managerial individuals. According to the present structure of the organization, it has been observed that Costco encompasses broad array of merchandises, where each of the division is operated by the responsible business managers and supervisors. Moreover, the procurement activities such as purchasing merchandises and other related activities are independently performed by the procurement managers that facilitate the organization to deliver quality products to the customers at reasonable prices (Costco Wholesale Corporation, 2012). In addition, the organization also tends to facilitate a customer care division that deliberately provides effective support to the final consumers. The organizing functions in Costco further incorporate different departments or divisions that are highly focused on managing workforce within the retail stores. According to the present day context, Costco incorporates 174,000 employees, in which 96,000 and 78,000 of workers work on full time and part time basis globally. Therefore, an effective managing capability is highly required in terms of delivering adequate service to the global consumers. With this concern, the organization possesses well-built human resource departments that are significantly focused on motivating and encouraging the workforce to highly focus on their respective roles and responsibilities (Costco Wholesale Corporation, 2012). Leading/Leadership The functions of leadership can be considered as the prime and foremost aspect that depicts organizational performances, capabilities as well as credibility within the business environment. The leadership functions also enable the organizations to adequately perform various important tasks in order to accomplish their respective business goals. The business leaders of any organization play a decisive part in adopting valuable decisions in various circumstances and formulating effective plans in order to accomplish organizational objectives. With this concern, it can be stated that the managers or the leaders need to perform superior roles other than planning or organizing. The leader further needs to incorporate the skills of motivating, communicating, encouraging and guiding the subordinates to effectively comply with the organizational targets. The functions of a manger or a leader further encompass various activities such as conflict handling, problem solving as well as providing adequate support to effectively accomplish the organizational objectives (Lewis, Goodman, Fandt & Michlitsch, 2007). In relation to the leading functions that are performed in Costco, it has been observed that the managers of the organization possess effective leadership skills that ultimately enhance its operational effectiveness at large. The managers of the organization are likely to make appropriate decisions concerning any issue that can hinder the performance of the organization. The leaders of the organization are highly dedicated to perform multiple roles that enable them to achieve desired business targets in the highly competitive retail industry. The leaders of the organization are also likely to perform various other functions such as workforce planning, training and development, recruitment and selection, remuneration as well as performance appraisal of the workers. With this regard, it can be stated that the leaders of Costco are further observe to be the major group of individuals in terms of playing effective decisional as well as informational roles. It has been recognized that the business functions of Costco involves a wide range of activities including administrative as well as merchandise distribution processes engaging different levels of workers. Therefore, the leaders of Costco tend to pay utmost importance to each level of workers ranging from different operational levels (Lewis, Goodman, Fandt & Michlitsch, 2007). Thus, on the basis of the above discussion, it can be affirmed that the leaders of Costco posses the style of participative or democratic as they pay utmost attention towards making the procedure of decision-making effective. It has been recognized that there pertain certain crucial problems in the administrative and operational processes of Costco. These include job evolution, transformation of job role, higher level of responsibilities, barrier handling and diversity management. The emerging competition within the warehouse merchandise providers as well as increasing number of retail organizations can be considered the major concerning factors behind the aforementioned problems. (Costco Wholesale Corporation, 2012). The leaders can mitigate the aforesaid problems as they possess the leadership style of participative or democratic. Controlling Controlling the organizational processes is regarded as one of the major managerial functions within an organization. The controlling phase in the managerial function implies measurements of activities performed aligning with the principles and standards prevailing within a specific organization. Moreover, the controlling phase also ensures to measure the level of deviation among the activities performed within an organization. With this regard, it can be stated that the controlling functions of the managers are highly focused on measuring performances of the employees as well as improving the existing activities that are performed within a particular organization (Lewis, Goodman, Fandt & Michlitsch, 2007). In relation to managerial function of controlling, the aspect of performance management includes various imperative measures that need to be enhanced or modified to improve the overall performance of the organizations. However, in terms of controlling, Costco does not hesitate to invest for attracting and retaining the right talent. Costco, desire to provide effective training and development programs to the employees with the intention of attaining its predetermined business targets in terms of raising operational effectiveness. In relation to measure the performance in Costco, it has been noted that the company has introduced the facet of performance management to analyze and evaluate the performances of its employees. Therefore, performance in Costco can be measured by tracking the results of certain important factors like Key Performance Indicator (KPI), productivity, quality and safety (Costco Wholesale, 2012). In addition, the other methods of measuring the performances such as monetary incentive, group incentive as well as other recognition awards also plays a decisive part in making the employees to perform their best to the organization. These type of motivating practices frequently conducts by the management team of the organization through its effective Human Resource Management (HRM) division. Costco is improving the policies and the guidelines particularly for the HR Managers as well as the line managers in order to design an effective facet of performance management. It has been viewed Costco is concentrating more upon its business leaders who could develop effectual strategies as well as plans to implement qualitative methods for improving the performance of the employees at large (Costco Wholesale Corporation, 2012). Conclusion Taking greater control of the organization’s external along with internal environment can be considered as one of the primary functions for the modern organizations in order to attain long-term sustainability in this competitive business market. It is in this context that the organizational control of the business processes, activities as well as resources are closely harmonized and directed towards the accomplishment of the organizational objectives with the virtues of better control. According to the present day context, it can be frequently observed that the organizations are highly focused on developing their managerial activities concerning the roles and responsibilities in order to accomplish their respective predetermined business targets. Managerial functions are the core practices that ensure to improve organizational performances. In relation to Costco, the organization seeks to effectively manage its various hierarchical members in order to improve its existing performance in the global retail and wholesale industry. With regard to the managerial functions involved in the organization, Costco deliberately performs a major set of practices that ensures to develop its overall performance in the global retail industry. In addition, it can also be stated that the effective utilization as well as the evaluation of the managerial functions supports Costco to attain superior competitive position globally in the respective business industry. References Costco Wholesale. (2012). Australian packaging convent action plan. Retrieved from http://cdn.costco.com.au/web/about/AUSTRALIAN_PACKAGING_COVENENT_ACTION_PLAN_COSTCO_APRIL_2012.pdf Costco Wholesale Corporation. (2013). What is Costco. Retrieved from http://www.costco.com/membership-information.html Costco Wholesale Corporation. (2012). Annual report 2012. Retrieved from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTY1MTY0fENoaWxkSUQ9LTF8VHlwZT0z&t=1 Costco Wholesale Corporation. (2011). Discover the secret. Retrieved from http://content.costco.com/Images/Content/Misc/PDF/costcostory_110111.pdf Daft, R. L., & Lane, P. (2009). Management. United States of America: Cengage Learning. Lewis, P. S., Goodman, S. H., Fandt, P. M. & Michlitsch, J, F. (2006). Management: challenges for tomorrow’s leaders. United States of America: Cengage Learning. Read More