Question 1:

Case study: Costco Wholesale Corporation

Part one- Costco: join the club

Questions:

1. Which of the three management-skill categories do you think Costco CEO James Sinegal draws upon most during his year-round visits to local Costco warehouses? Explain.

2. What aspects of Costco's business model exemplify the transition from "the old workplace" to the "new workplace," and why?

3. How does Costco's high worker-retention rate help the warehouse dub maintain low prices?

Part two- James Sinegal, the conscience of a corporation

Questions:

1. What are the motivations and personality traits that compel individuals like James Sinegal to strike out on their own, preferring the risks of entrepreneurship to the relative safety of working for others? Does Sinegal qualify as a social entrepreneur? Why or why not?

2. In what way does the carefully crafted order of Costco's five-point Code of Ethics represent a rejection of the profit-maximizing approach to evaluating corporate social performance?

3. Which of the four types of corporate cultures best describes Costco? Identify ways that James Sinegal exhibits cultural leadership to create and maintain a high-performance organization?

Part three: Costco Turns 500

Questions:

I. What strategy formulation tools might top management at Costco use to assess opportunities and threats to the company's future expansion?

2. Explain how Costco's select test-market ware-houses demonstrate cooperation and connectedness between the different levels of planning and strategy throughout an organization.

3. How does James Sinegal's recounting of Costco's history using early warehouse photographs at manager's meetings illustrate the role of corporate culture in supporting an organization's strategy and performance?

Part four: Costco's generous pay yields generous profits

Questions:

1. What sacrifices does Costco make so that it may pay employees higher wages?

2. What are the benefits of promoting from within? What might be possible drawbacks to having a high internal promotion rate?

3. What steps could Costco take to foster greater diversity among its management, particularly as it relates to the promotion of women?

Part five: Providing Leadership in bulk

Questions:

1. What is moral leadership, and why is it increasingly important for global business?

2. What types of leadership are necessary for leading change? In what ways has Costco's management demonstrated such leadership?

3. What motivational impact might Costco's handling of the Cuernavaca expansion have on employees, both in Mexico and internationally? Explain.

Part six: Costco's whopper of a fish tale

Questions:

I. How does Costco's famous and oft-recounted salmon story help management create a culture of performance and quality?

2. What role does the Salmon Awards program play in Costco's system of control?

3. How does Costco reduce its operating expenses by investing in technologies that enable outside suppliers to manage inventories and ship orders directly to customers?