Stakeholders

This article discusses big discounter Costco, and how its CEO really seems to be pushing what I call a "stakeholder" view of the company. The opposite model, of course--one that I'm absolutely not a fan of--is the simplistic, limited "shareholder" view: profits profits profits and end value to the shareholder. The conflict evidences itself here:

How Costco Became the Anti-Wal-Mart - New York Times: "Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco 'it's better to be an employee or a customer than a shareholder.'"

A stakeholder model seeks to embrace employees, suppliers, consumers, and owners equally and together. While a truly equitable stakeholder model is probably a pipe dream for public companies (except perhaps in cases of a truly strong CEO who is both benevolent and has his board and shareholders by a leash), but limited models, especially in companies like Starbucks and Costco, have been evident of late. It presents some hope that capitalism can find moral, humanitarian, equitable ground to stand on. Delivering low prices and high quality to the consumer, while providing strong pay and firm benefits to the employee, end value to the shareholder, and profit and well being for the supplier and the supplier's own stakeholders is an excellent but difficult model to follow. It's a model that Costco is trying to achieve as it flies againt the trends of the Wal-Marts of the world...

Delivering real value without obscene markups is a sure way of gaining loyalty and delivering profits through partnership.