An Examination of Costco Wholesale Corporation and Target Corporation's Exercise of Corporate Social Responsibility stakeholders:TargetCostcoApproximate cost of company response:TargetCostcoConclusion:Executive SummaryThis report seeks to explore how Costco Wholesale Corporation and Target Corporation, two powerful competitors in the retail industry, exercise their corporate social responsibility initiatives (CSR) in terms of remuneration. Their sheer number of workers and influence within the industry requires them to prioritize their employee relations. Facts about financial data, human resources statistics and other company information were collected from the MSCI database, company websites, news articles and customer processing stories. employees. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayHealthy labor relations have a direct impact on society and are an important part of the CSR initiatives offered by a company, not only by developing a strong public image, but also helping to increase the company's revenue.Introduction: Costco Wholesale Corporation and Target Corporation are both major players in the retail industry. That being said, Costco dominates the Warehouse Club and Supercenter sector, while Target leads the department store sector. The two companies have taken different paths to creating value, with Target prioritizing brand building and convenience, while Costco seeks to build a near-egalitarian culture and nurture a loyal consumer base. Although they differ in their respective business models, they both devote time and resources to CSR initiatives. A company’s customer value proposition (CVP) is at the heart of any business model. Target prides itself on developing and maintaining knowledgeable and helpful employees, which they believe is their competitive advantage and a large part of their shopping experience. As such, employee compensation comes into play in their value proposition. Costco's CVP promotes creating value and providing its employees with a support system, minimizing turnover as much as possible. The actions taken by their management highlight their commitment to their team members. Costco is considered an industry leader in social initiatives by devoting efforts to stakeholder goals. They have maintained a loyal customer base by creating a wholesome experience that is largely dependent on a strong relationship with its employees. Conversely, Target has successfully attracted and retained customers by building a reputation on evolving value that aligns with consumer trends and expectations. Ultimately, their different business models result in divergent labor management practices. The problem and why it matters: With the increased emphasis on CSR, in terms of the ethical treatment of a company's employees and relationship with management, modern businesses are under pressure to deliver value to society in addition to simply satisfying the needs of shareholders. Due to their large workforces, Target and Costco constantly face the challenge of balancing the interests of shareholders and employees. That being said,The most visible aspect of employee treatment is their compensation, and this is where the two companies' policies diverge. Although Target has denied continued calls from within to raise their wages, Costco's proactive compensation practices have assuaged that concern. It is essential for a business to have strong management practices in place because employees are a company's greatest asset and can lead to increased business success. As Paul Spiegelman, CEO of Beryl Companies, said, employees are "the most important stakeholders in a company" and "if you want employees to take a vested interest in the big picture, treat them as stakeholders” (Spiegelman). Treating employees well makes workers feel valued and respected, which, in turn, results in increased customer satisfaction. A study published in the Journal of Applied Psychology used meta-analysis to find a substantial correlation between employee satisfaction and meaningful business outcomes such as profits and employee turnover (Harter, Schmidt, Hayes). The type of healthy relationships described in this study may in part result from appropriate compensation. Additionally, the supply of jobs in the retail sector exceeds demand, creating tension within the market (Peterson). As a result, companies are feeling increased pressure to improve employee treatment and relations to better retain and attract workers. Key Stakeholders Affected: There are many stakeholders affected by the issue of employee treatment and compensation in both companies. These include stakeholders such as employees, management, consumers, shareholders and competitors. Although most stakeholders have similar positions and orientations between Target and Costco, differences exist between management, employees, and competitors, influencing their CSR (Figures A and B). Positions and Importance of Stakeholders: EmployeesThe stakeholders most affected by any action taken on the issue are the employees (market/internal) of each respective company, as they are directly affected by the company policy (Greenspan). In several cases, Target and Costco employees have expressed concerns about fair wages, benefits and labor standards. Costco has a worker-centered culture. Management's esteem for employees comes from its “3=1 rule” according to which one good employee is worth three less good ones (Taube). Costco employees have also joined unions that Costco Wholesale Corporation is willing to work with, thus having greater prominence compared to Target workers (Levine-Weinberg). Target employees also want to see their wages and benefits increase, but they are playing catch-up. Due to Target's anti-union culture, employees have less visibility because their management is not fully willing to cooperate with them (Zillman). That said, dissatisfied employees credibly threaten to strike, even though their power at the bargaining table is somewhat undermined by the large number of part-time workers who have less credibility than their full-time colleagues (Bose ). in a company is responsible for establishing guidelines and value propositions regarding employee relations, specifying that this issue is directly related to their actions. Although the value propositions of both companies aim above all to bringvalue to consumers, they both make it clear in their respective mission statements that their responsibilities start with employees, then take into account their consumers and their community. Management can be for or against improving employee treatment and compensation, depending on what they ultimately choose to prioritize in terms of value creation (Krogue). The great importance of management comes from its legal power and decision-making abilities, as it creates policies, manages salaries, and manages public perception. Costco management works with unions to resolve conflicts, indicating that they realize that their company's profitability is directly dependent on maintaining good employee relations (Levine-Weinberg). Although most employees are not part of a union, California workers have unionized through the Teamsters and resolve their disputes through them. Costco workers and management are generally able to get along, largely because of the image management wants to maintain as satisfied workers. It's worth noting that the CEO of Costco makes about 20 times his average employee salary, while the CEO of Target makes 146 times his average employee salary (Cardenal). Costco management recognizes the importance of investing in employees and is willing to take a pay cut to do so. This dichotomy shows a clear difference in corporate culture between the two companies. However, although invested in treating employees well, management is motivated to reduce certain benefits because of their increasing impact on the bottom line (Levine-Weinberg). And while Costco workers have a say in these matters, it's management that must consider the rising cost of current and future benefits. Target management, without the worker-centered mentality of Costco decision-makers, is against wage and benefit increases. largely because of the possible impact on profits. They have a higher level of importance than employees because of their entrepreneurial spirit and discouragement of unions (Zillman). Although their workers have not had much success in lobbying for wage increases, the actions of competitors have caused management to raise wages. Wal-Mart's recent wage increase has prompted Target to respond with raises of its own. Even if management conceded a salary increase, it may not have a big impact due to the large proportion of Target employees who are part-time and therefore not affected by this change (Bose). ConsumersConsumers (market/external) often choose to make their purchases. in places that correspond to their personal values and moral standards. Externally, Target and Costco have excellent employee handling procedures, compared to their competitor Walmart (Cardenal). Scandals and lawsuits involving Target and Costco are often successfully hidden from the public. In terms of importance, consumers have high economic power since they could choose to boycott the company, but they rank relatively low due to their lack of urgency. The lack of consistent and complete information has hampered their use of economic power.ShareholdersShareholders (market/external) are relatively less involved in the issue of employee treatment and compensation, but tend to be invested in the right health of the company. According to the principles of stakeholder theory, as well as taking into account thevalue propositions of these respective companies, companies must first and foremost focus on the treatment of employees in order to achieve the best returns. Shareholders possess a certain importance because of their voting power, which translates into their influence over a company's financial activities (e.g., employee compensation). In particular, Target shareholders have a strong voice in the actions of their management. This is due to the reasoning that Target is a more volatile company and has generated less growth, requiring shareholders to be more involved in order to feel like they are protecting and growing their investments (Hansen). Target's stock price increased only moderately over a five-year period, reaching 31% (Figure C). This growth, however, has experienced a series of ups and downs which may worry investors. Shareholders could bear this volatility in part due to the attractive $0.60/share quarterly dividend, as opposed to Costco's sweeter $0.45/share dividend (Street Insider). Costco shareholders are more confident in the company's ability to provide stable returns, without calling into question company policy. Over the same five-year period, Costco's stock value increased steadily, showing an impressive 76% increase (Figure D). Competitors Competitors (non-market/external) can affect the actions of both companies in terms of policies, compensation and treatment of employees. Target's recent minimum wage increase was a response to competitor Walmart's (Bose) base wage increase. This is an example of how Target is directly impacted by its competitors on issues of compensation and treatment of employees. Unlike Target, driven by trends, Costco sets the pace (Taube). Although competitors hold high information power and have proven that their actions clearly impact Target and Costco's decisions, they do not have the ability to directly implement change and therefore have moderate importance. Stakeholders: TargetTarget has long believed that having happy, healthy team members will result in increased customer satisfaction, more active involvement in their communities, and better overall business success. Although Target is known as "the best Walmart," it continues to be heavily criticized for its labor practices, ranking in the third quartile according to the MSCI ESG Rating (Target Corporation ESG Rating). Although it claims to support its employees, Target's history shows that it refuses to give in to complaints about employee mistreatment. Target has always been vehemently anti-union, requiring its employees and management to watch anti-union videos as part of their training (Wang). These videos, coupled with corporate culture, aim to scare employees by emphasizing that unionization would threaten their jobs and Target's competitiveness in the price-driven retail industry. This has been very successful in undermining union organizing efforts and stifling employee complaints. In 2011, at a Target store in Valley Stream, New York, employees attempted to unionize to improve their wages, but were rejected (Greenhouse). They claimed they were illegally threatened with dismissal for showing support for the union and were prohibited from wearing pro-union buttons. After the National Labor Relations Board found Target guilty of violating federal labor laws, management denied theseallegations and stated that Target “firmly believed that it had complied with all store laws and that the election had been fair” (Greenhouse). In retaliation, Target allegedly offered to buy out the workers who voted “yes” and made them sign an agreement not to speak to the media about the failed union campaign (both). This significant event highlights Target's strong anti-union culture, which has consistently suppressed employee concerns, further increasing tensions between workers and management. Target has raised its minimum wage twice in the past two years; in April 2015, it increased it to $9 and more recently, in April 2016, to $10, following Walmart (Huffington Post). Target's reluctance to raise its minimum wage on its own initiative reflects poorly on the company, because it suggests that Target cares more about keeping up with its competitors than the ongoing concerns of its employees. In addition, Target is currently a defendant in two class action lawsuits regarding non-payment of overtime to operating group executives in New York and California (Target Corporation ESG Controversies). Similar to the Valley Stream case in 2011, Target has denied the allegations, saying group leaders are classified as managers who do not require additional compensation. As a result, Target's employee count has been decreasing since 2013 (Target Corporation ESG Rating). CostcoCostco is known for treating its employees well and having a generous benefits plan. The company prides itself on strictly adhering to its code of ethics, which places employees before shareholders (Code of Ethics). However, beneath the surface, things may not be as pretty as they seem. The MSCI ESG Rating Report places Costco in the third quartile for labor management (Costco Corporation ESG Rating). In January 2015, the company faced a major class action lawsuit over allegations of unpaid overtime, denied breaks and other labor law violations in California. The lawsuit claimed Costco employees would work unpaid lunch breaks and be wrongfully timed out, even though they were still on duty. When it was ruled in February 2015 that Costco owed $17 million in unpaid wages for missed lunch breaks alone, they relented and took the case to federal court. Although the case is not over, Costco has shown a willingness to compromise (Chicago Overtime Law Center). Despite these controversies, Costco has maintained healthy relationships with its employees by implementing plans and policies that benefit its workers. In March 2016, Costco raised the minimum wage for the first time in nine years to $13-13.50 per hour, 80% higher than the current U.S. federal minimum wage (Pettypiece). Despite pressure from shareholders and investors, Costco refuses to cut wages and benefits. When asked if Costco could make more money by cutting its average wage by 20 percent, the CFO said, "The answer is yes." But we’re not going to do that” (Berman). So the average Costco worker makes about $45,000 a year, compared to $22,260 at Target (Glassdoor). This high compensation is reflected in its low employee turnover rate of 6%, compared to the retail industry average of 27% in 2014 (Peterson). Approximate cost of the company's response: Target management, on the other hand, benefits from not paying its employees salaries as high as Costco's in the short term. It is clear from the income of the board of directors and the.

Essay / An Examination of Costco Wholesale Corporation and Target Corporation's Exercise of Corporate Social Responsibility stakeholders:TargetCostcoApproximate cost of company response:TargetCostcoConclusion:Executive SummaryThis report seeks to explore how Costco Wholesale Corporation and Target Corporation, two powerful competitors in the retail industry, exercise their corporate social responsibility initiatives (CSR) in terms of remuneration. Their sheer number of workers and influence within the industry requires them to prioritize their employee relations. Facts about financial data, human resources statistics and other company information were collected from the MSCI database, company websites, news articles and customer processing stories. employees. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayHealthy labor relations have a direct impact on society and are an important part of the CSR initiatives offered by a company, not only by developing a strong public image, but also helping to increase the company's revenue.Introduction: Costco Wholesale Corporation and Target Corporation are both major players in the retail industry. That being said, Costco dominates the Warehouse Club and Supercenter sector, while Target leads the department store sector. The two companies have taken different paths to creating value, with Target prioritizing brand building and convenience, while Costco seeks to build a near-egalitarian culture and nurture a loyal consumer base. Although they differ in their respective business models, they both devote time and resources to CSR initiatives. A company’s customer value proposition (CVP) is at the heart of any business model. Target prides itself on developing and maintaining knowledgeable and helpful employees, which they believe is their competitive advantage and a large part of their shopping experience. As such, employee compensation comes into play in their value proposition. Costco's CVP promotes creating value and providing its employees with a support system, minimizing turnover as much as possible. The actions taken by their management highlight their commitment to their team members. Costco is considered an industry leader in social initiatives by devoting efforts to stakeholder goals. They have maintained a loyal customer base by creating a wholesome experience that is largely dependent on a strong relationship with its employees. Conversely, Target has successfully attracted and retained customers by building a reputation on evolving value that aligns with consumer trends and expectations. Ultimately, their different business models result in divergent labor management practices. The problem and why it matters: With the increased emphasis on CSR, in terms of the ethical treatment of a company's employees and relationship with management, modern businesses are under pressure to deliver value to society in addition to simply satisfying the needs of shareholders. Due to their large workforces, Target and Costco constantly face the challenge of balancing the interests of shareholders and employees. That being said,The most visible aspect of employee treatment is their compensation, and this is where the two companies' policies diverge. Although Target has denied continued calls from within to raise their wages, Costco's proactive compensation practices have assuaged that concern. It is essential for a business to have strong management practices in place because employees are a company's greatest asset and can lead to increased business success. As Paul Spiegelman, CEO of Beryl Companies, said, employees are "the most important stakeholders in a company" and "if you want employees to take a vested interest in the big picture, treat them as stakeholders” (Spiegelman). Treating employees well makes workers feel valued and respected, which, in turn, results in increased customer satisfaction. A study published in the Journal of Applied Psychology used meta-analysis to find a substantial correlation between employee satisfaction and meaningful business outcomes such as profits and employee turnover (Harter, Schmidt, Hayes). The type of healthy relationships described in this study may in part result from appropriate compensation. Additionally, the supply of jobs in the retail sector exceeds demand, creating tension within the market (Peterson). As a result, companies are feeling increased pressure to improve employee treatment and relations to better retain and attract workers. Key Stakeholders Affected: There are many stakeholders affected by the issue of employee treatment and compensation in both companies. These include stakeholders such as employees, management, consumers, shareholders and competitors. Although most stakeholders have similar positions and orientations between Target and Costco, differences exist between management, employees, and competitors, influencing their CSR (Figures A and B). Positions and Importance of Stakeholders: EmployeesThe stakeholders most affected by any action taken on the issue are the employees (market/internal) of each respective company, as they are directly affected by the company policy (Greenspan). In several cases, Target and Costco employees have expressed concerns about fair wages, benefits and labor standards. Costco has a worker-centered culture. Management's esteem for employees comes from its “3=1 rule” according to which one good employee is worth three less good ones (Taube). Costco employees have also joined unions that Costco Wholesale Corporation is willing to work with, thus having greater prominence compared to Target workers (Levine-Weinberg). Target employees also want to see their wages and benefits increase, but they are playing catch-up. Due to Target's anti-union culture, employees have less visibility because their management is not fully willing to cooperate with them (Zillman). That said, dissatisfied employees credibly threaten to strike, even though their power at the bargaining table is somewhat undermined by the large number of part-time workers who have less credibility than their full-time colleagues (Bose ). in a company is responsible for establishing guidelines and value propositions regarding employee relations, specifying that this issue is directly related to their actions. Although the value propositions of both companies aim above all to bringvalue to consumers, they both make it clear in their respective mission statements that their responsibilities start with employees, then take into account their consumers and their community. Management can be for or against improving employee treatment and compensation, depending on what they ultimately choose to prioritize in terms of value creation (Krogue). The great importance of management comes from its legal power and decision-making abilities, as it creates policies, manages salaries, and manages public perception. Costco management works with unions to resolve conflicts, indicating that they realize that their company's profitability is directly dependent on maintaining good employee relations (Levine-Weinberg). Although most employees are not part of a union, California workers have unionized through the Teamsters and resolve their disputes through them. Costco workers and management are generally able to get along, largely because of the image management wants to maintain as satisfied workers. It's worth noting that the CEO of Costco makes about 20 times his average employee salary, while the CEO of Target makes 146 times his average employee salary (Cardenal). Costco management recognizes the importance of investing in employees and is willing to take a pay cut to do so. This dichotomy shows a clear difference in corporate culture between the two companies. However, although invested in treating employees well, management is motivated to reduce certain benefits because of their increasing impact on the bottom line (Levine-Weinberg). And while Costco workers have a say in these matters, it's management that must consider the rising cost of current and future benefits. Target management, without the worker-centered mentality of Costco decision-makers, is against wage and benefit increases. largely because of the possible impact on profits. They have a higher level of importance than employees because of their entrepreneurial spirit and discouragement of unions (Zillman). Although their workers have not had much success in lobbying for wage increases, the actions of competitors have caused management to raise wages. Wal-Mart's recent wage increase has prompted Target to respond with raises of its own. Even if management conceded a salary increase, it may not have a big impact due to the large proportion of Target employees who are part-time and therefore not affected by this change (Bose). ConsumersConsumers (market/external) often choose to make their purchases. in places that correspond to their personal values and moral standards. Externally, Target and Costco have excellent employee handling procedures, compared to their competitor Walmart (Cardenal). Scandals and lawsuits involving Target and Costco are often successfully hidden from the public. In terms of importance, consumers have high economic power since they could choose to boycott the company, but they rank relatively low due to their lack of urgency. The lack of consistent and complete information has hampered their use of economic power.ShareholdersShareholders (market/external) are relatively less involved in the issue of employee treatment and compensation, but tend to be invested in the right health of the company. According to the principles of stakeholder theory, as well as taking into account thevalue propositions of these respective companies, companies must first and foremost focus on the treatment of employees in order to achieve the best returns. Shareholders possess a certain importance because of their voting power, which translates into their influence over a company's financial activities (e.g., employee compensation). In particular, Target shareholders have a strong voice in the actions of their management. This is due to the reasoning that Target is a more volatile company and has generated less growth, requiring shareholders to be more involved in order to feel like they are protecting and growing their investments (Hansen). Target's stock price increased only moderately over a five-year period, reaching 31% (Figure C). This growth, however, has experienced a series of ups and downs which may worry investors. Shareholders could bear this volatility in part due to the attractive $0.60/share quarterly dividend, as opposed to Costco's sweeter $0.45/share dividend (Street Insider). Costco shareholders are more confident in the company's ability to provide stable returns, without calling into question company policy. Over the same five-year period, Costco's stock value increased steadily, showing an impressive 76% increase (Figure D). Competitors Competitors (non-market/external) can affect the actions of both companies in terms of policies, compensation and treatment of employees. Target's recent minimum wage increase was a response to competitor Walmart's (Bose) base wage increase. This is an example of how Target is directly impacted by its competitors on issues of compensation and treatment of employees. Unlike Target, driven by trends, Costco sets the pace (Taube). Although competitors hold high information power and have proven that their actions clearly impact Target and Costco's decisions, they do not have the ability to directly implement change and therefore have moderate importance. Stakeholders: TargetTarget has long believed that having happy, healthy team members will result in increased customer satisfaction, more active involvement in their communities, and better overall business success. Although Target is known as "the best Walmart," it continues to be heavily criticized for its labor practices, ranking in the third quartile according to the MSCI ESG Rating (Target Corporation ESG Rating). Although it claims to support its employees, Target's history shows that it refuses to give in to complaints about employee mistreatment. Target has always been vehemently anti-union, requiring its employees and management to watch anti-union videos as part of their training (Wang). These videos, coupled with corporate culture, aim to scare employees by emphasizing that unionization would threaten their jobs and Target's competitiveness in the price-driven retail industry. This has been very successful in undermining union organizing efforts and stifling employee complaints. In 2011, at a Target store in Valley Stream, New York, employees attempted to unionize to improve their wages, but were rejected (Greenhouse). They claimed they were illegally threatened with dismissal for showing support for the union and were prohibited from wearing pro-union buttons. After the National Labor Relations Board found Target guilty of violating federal labor laws, management denied theseallegations and stated that Target “firmly believed that it had complied with all store laws and that the election had been fair” (Greenhouse). In retaliation, Target allegedly offered to buy out the workers who voted “yes” and made them sign an agreement not to speak to the media about the failed union campaign (both). This significant event highlights Target's strong anti-union culture, which has consistently suppressed employee concerns, further increasing tensions between workers and management. Target has raised its minimum wage twice in the past two years; in April 2015, it increased it to $9 and more recently, in April 2016, to $10, following Walmart (Huffington Post). Target's reluctance to raise its minimum wage on its own initiative reflects poorly on the company, because it suggests that Target cares more about keeping up with its competitors than the ongoing concerns of its employees. In addition, Target is currently a defendant in two class action lawsuits regarding non-payment of overtime to operating group executives in New York and California (Target Corporation ESG Controversies). Similar to the Valley Stream case in 2011, Target has denied the allegations, saying group leaders are classified as managers who do not require additional compensation. As a result, Target's employee count has been decreasing since 2013 (Target Corporation ESG Rating). CostcoCostco is known for treating its employees well and having a generous benefits plan. The company prides itself on strictly adhering to its code of ethics, which places employees before shareholders (Code of Ethics). However, beneath the surface, things may not be as pretty as they seem. The MSCI ESG Rating Report places Costco in the third quartile for labor management (Costco Corporation ESG Rating). In January 2015, the company faced a major class action lawsuit over allegations of unpaid overtime, denied breaks and other labor law violations in California. The lawsuit claimed Costco employees would work unpaid lunch breaks and be wrongfully timed out, even though they were still on duty. When it was ruled in February 2015 that Costco owed $17 million in unpaid wages for missed lunch breaks alone, they relented and took the case to federal court. Although the case is not over, Costco has shown a willingness to compromise (Chicago Overtime Law Center). Despite these controversies, Costco has maintained healthy relationships with its employees by implementing plans and policies that benefit its workers. In March 2016, Costco raised the minimum wage for the first time in nine years to $13-13.50 per hour, 80% higher than the current U.S. federal minimum wage (Pettypiece). Despite pressure from shareholders and investors, Costco refuses to cut wages and benefits. When asked if Costco could make more money by cutting its average wage by 20 percent, the CFO said, "The answer is yes." But we’re not going to do that” (Berman). So the average Costco worker makes about $45,000 a year, compared to $22,260 at Target (Glassdoor). This high compensation is reflected in its low employee turnover rate of 6%, compared to the retail industry average of 27% in 2014 (Peterson). Approximate cost of the company's response: Target management, on the other hand, benefits from not paying its employees salaries as high as Costco's in the short term. It is clear from the income of the board of directors and the.

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