Cases of Greece and Sweden Working Conditions Introduction Â Â Â Â The essay has three major parts. The first part analyses Greece working conditions and how government officials respond to the issue. This is accompanied by a moral assessment of the issue presented in this section. The second part discusses Sweden working conditions, a country which is said to have one of the best working conditions around the world. This part analyses the policies passed by the Swedish government and all ethical issues arising from such policies. The third part is a personal assessment of the two issues presented parts one and two. This section employs virtues of ethics framework to come up with ethical implications of the issues presented. Working Condition in Greece Â Â Â Â Greece working standards are relatively lower compared to those of other European countries. Different studies that support this argument have been conducted. From the data provided by the Social Insurance Foundation and Labor Inspectors in Greece, 35.8 percent of the participants in a survey conducted in 2011specified that there were no health and safety provisions in the firm they worked. 48.7% stated that, to their knowledge, there was no physician assigned to them. In the construction sector, 53.5% had a health and safety provision document while 58.9% in the manufacturing sector had the same. 66.1% of the respondents in the public sector said they lacked such a document (Alexopoulos 2012, p.115). Â Â Â Â In its efforts to raise labor standards in Greece, the Greece government initiated several reforms. The reforms aimed at improving working conditions in the country and protecting peopleâ€™s welfare. Greece is of the countries which experienced the wrath of European crisis. The aftermath of the crisis required tremendous changes in the labor markets. However, these reforms led to limited protection of workers in the labor market. This aspect violated business ethics and essential social rights. Law number 3863/2010 introduced fundamental changes in the labor market. Some of the unfavorable reforms were; shortening the period given as a notice to the termination of white-collar workers, reducing white-collar workers reduced by a half, keeping operational costs must between 5% and 10%, which led to layoffs. However, the minimum wage rates for workers under the age of 25 years reduced to 84% of the set minimum wage. For underage workers, the minimum wage rate set at 70% of the set minimum wage. Â Â Â Â Apart from the labor market reforms, the government instituted in 2010, service cuts in pension and other important reforms in the social security regulations. The regulations include; zero increase in the current pension over the next 3 years. For the uninsured persons over the age of 65, their basic pension criteria underwent reforms. The amount of the pension is set at â‚¬360. The national budget will finance the pension from the year 2018. Salary cut for employees between 25 years was set between 22% and 32%. The employer can impose this cut without the consent of the employee (Matsaganis 2012, p.450). Analysis of Ethical Implications of Greece Work Policies Â Â Â Â Greece policy makers seem to employ utilitarian principle, which states that one determines what is right by contrasting the outcome of all related agents of alternative policy for a particular condition (Bentham 2000, p.70). This principle does not take into account all the people in the society. Undesirable policy can be passed which does not benefit the society at large. Greece labor laws and polices does not seem to benefit the entire society. On the contrary, they benefit a section of the community. Â Â Â Â According to (Daluka 2001, p.20) it is right to exercise what is good for the largest population of people. The study reveals that the greatest number of people in the work environment had the health and safety document. Companies in Greece seem to value policies that yield the greatest benefit to the greatest number of people. However, James Rachel, critic of the utilitarian rule, would have argued otherwise. In his criticisms, he points out that, everyone is equal and that everybodyâ€™s happiness is important. The group of people who lack the document in this case can claim that businesses in Greece did violate business ethics. This means that utilitarianism is not the best framework to formulate rules and regulations which affect the entire society. Labor markets affect the whole economy in several ways .This means that if there is a fault in formulation of labor laws, the economy will experience problems arising from shortage of labor, a crucial factor in the production process (Rachel 2007, p56). Greece labor reforms further show how the government violates ethics. A salary cut without the consent of employees is unethical, and violates ethics. However, according to utilitarianism, this might not be a big issue so long as it yields maximum benefits to the largest number of people. According to (Goodin 2007, p.245) utilitarianism as a principle should guide political leaders while making decisions that affect the society at large. He points out that leaders must take into account the impacts of the policies they pass on the entire society, other than focusing on a small group of people. Working Conditions in Sweden Â Â Â Â Working conditions in Sweden are one of the best on the planet. This is the case because the government has introduced strict worker-safety and environmental regulations. Its manpower of 4.3 million is disciplined, instructed, and experienced in the most current technologies. About 87 percent of Swedish laborers have a place with a workerâ€™s party, ostensibly the worldâ€™s most astounding rate. In addition, unions are active accomplices with organizations in actualizing more proficient projects. Swedish enactment accommodates work representation on the board of directors of large organizations and obliges administration to arrange with the unions prior to actualizing significant changes. Management-labor cooperation participation is customarily non-conferential, meaning labor strikes are rare in the country (Cox 1950, p.390). There is no fixed minimal wage, and all wages are determined through collective bargaining. Since 1991, the real wage increments have surpassed those of most EU nations. As the EMU civil argument picks up force, workerâ€™s parties are calling for buffer funds, like those made in Finland, as a â€œcushionâ€ for benefits funds and other laborer benefits throughout the shift period to the euro, in cases where there are huge currency fluctuations (HammarstrÃ¶m 2013, p.142). Â Â Â Â Many business spectators, including those from the International Monetary Fund (IMF), have suggested some crucial labor market changes, including wage differentiation (to reduce labor costs for unskilled jobs). These reforms are an incentive to raise individual competence, reduction of income taxes, making labor unions bears the costs of unemployment in the insurance system, as well as liberalization of labor protection legislation. These measures are believed to increase efficiency and competitiveness. Labor representatives in Sweden complain that such measures would burden workers. Â Â Â Â On the major Swedenâ€™s labor- related issue is high levels of unemployment. Within a very short time in the early 1990s, the unemployment rate rose from a level which was considered the lowest in the industrialized world to the normal EU levels, where it stayed until the business cycle improved in 1998-99. By 2000, the unemployment rates were less than 5%. However, the rate was 8.7 percent for those workers included in training programs. Swedenâ€™s government has a plan to reduce the unemployment rate to 4 percent and to guarantee that 80 percent of the working-age populace has a full-time work by 2015 (Drobnic 2012, p.205). Assessment of the issue and its ethical Implications Â Â Â Â A careful examination of Swedenâ€™s labor laws and policies shows that the policy makers employ social justice. This is clearly depicted the way polices have been formulated. According to (Betham 2000, p.80) social justice theory asserts that people should exercise fairness in their when dealing with one another. Rawlâ€™s theory of social justice postulates that the society consists of free and equal persons who must be treated equally in political and socio-economic affairs (Blocker 2000, p.30). Swedish government seems to take into account social justice principles before passing labor regulations. Â Â Â Â First, the government has come up with strict anti-discrimination laws, contained in Swedish Antidiscrimination Act of 2009. One of the rules of social justice theory is protection against any form of discrimination. By passing the Act, Swedish legislature took into account the rights and freedoms of workers. Therefore, their rules and decisions are in line with the social justice framework. The Act aims at eliminating discrimination in all places of work. It applies to all employees, employers, and job applications irrespective of whether or not the discrimination is intentional. This means that people expect to be treated with dignity, regardless of their appearance or beliefs. If an employer in Sweden is found discriminating his/her workers, he or she is required to pay damages. Failure to this, he/she may end up in prison, and this acts as a lesson to all others who practice discrimination. Â Â Â Â On the other hand, Swedish government has made it mandatory for all workers to belong to a labor union (Blau and Khan 1999, p130). This is aimed at protecting the welfare of all workers in Sweden. This is another dimension of social justice. If a member of the union faces a problem, the union is supposed to take care of him/her. All members of the unions are treated equally. This ensures that all of them have equal representation. Rawlâ€™s theory disallows unequal representation in political and social matter. Â Â Â Â Swedish Work Environment Authority is governed by the Work Environment Act, which requires employees, employers and equipment suppliers to share responsibility in maintaining safe working conditions. According to this Act, these parties should restrict workplace hazards and prevent accidents. This clearly shows that the policy makers take into consideration the importance of social cooperation. Social justice principles require each person in the society to benefit others, and to prevent harm. This way, social justice is said to prevail in the society. Individual Moral Assessment of the Issue Â Â Â Â To better understand moral implications of the cases presented above, a careful analysis using a different ethical framework is necessary. This section discusses how the issues presented above relate to the ethics of virtue framework. Â Â Â Â According to Martha Nussbaum arguments, a just society must be characterized by conditions that promote fundamental entitlements for all people. The entitlements include; bodily health, normal life, bodily integrity, senses and imaginations, as well as practical reason, just to mention a few. Failure to recognize these entitlements constitutes unethical behavior (Nussbaum 1993, p 89) . Greece law makers seem to deviate from this moral framework. Some of the policies do not take into account virtues of ethics. For example, cutting an employeeâ€™s wage without his/her consent is morally wrong. It hurts oneâ€™s feeling and violates virtues of ethics such as kindness, prudence, integrity, and more importantly respect. Passing laws that lower peopleâ€™s welfare is not consistent with the virtue ethics framework. Â Â Â Â On the other hand, Sweden takes into consideration virtues of ethics framework. The laws and polices discussed above clearly show how that policy makers in the country are very much concerned with peopleâ€™s welfare. Being mindful of others welfare is a crucial virtue. It ensures respect in the society and promotes justice. Moreover, Swedish government promotes fairness in workerâ€™s representation. Again, this is a clear indication of the governmentâ€™s commitment to promote virtues which promote peopleâ€™s moral excellence and their well-being. Conclusion Â Â Â Â From the analysis presented in this paper, it is clear that governments across the world employ different ethical frameworks when formulating their policies. The distinction between Greece and Sweden working condition reveals that different countries value different policies. However, the paper points out several unethical practices in Greece. On the other hand, Sweden government seems to follow ethics when drafting their laws and regulations. In addition to this, the paper reveals that people and companiesâ€™ ethical understanding across the world tend to be influenced by governmentâ€™s actions. This means that Swedish citizens tend to practice ethics more than Greece citizens. References Â Â Â Â Alexopoulos, E. (2012), â€˜Sickness absence in the private sector of Greece: Comparing shipyard industry and national insurance data, International journal of environmental research and public health , Journal of Social Affairs, Vol. 34, pp, 1171-1181. Betham, J.(2000), â€˜Principles of Morals and Legislation,â€™Principles of Morals and Legislation. Newyork: Botache Books, pp.78-85. Blau, F., and Khan, L. (1999), â€˜Institutions and laws in the labor marketâ€™ Handbook of labor economics, vol.3, pp.130-140.Blocker, G. and Elizabeth S. (2000), â€˜John Rawlsâ€™ theory of social justiceâ€™, Sages Journals ,pp. 24-34. Cox, A.,(1950), â€˜Regulation of Collective Bargaining by the National Labor Relations Boardâ€™ Harvard Law Review, pp.389-432. Daluka, F. (2001), â€˜Global Ethics and Business: A Philosophical Approachâ€™, Global Ethics and Business: A Philosophical Approach, Cambridge: Cambridge University Press, pp. 17-20. DrobniÄ, S.(2012), â€˜Good job, good life? Working conditions and quality of life in Europeâ€™, Social indicators research, pp.205. Gordin, S. (2007), â€˜Utilitarianism as a public philosophy,â€™ Cambridge: Cambridge University Press., HammarstrÃ¶m, A. (2013), â€˜Higher education and psychological distress: A 27-year prospective cohort study in Swedenâ€™, Scandinavian journal of public health. Pp.140-145.Matsaganis, M..(2012), â€˜Social policy in hard times: The case of Greeceâ€™, Critical Social Policy, pp.406-421. Nussbaum, M. (1993), â€˜The quality of lifeâ€™, NewYork: Oxford University Press. Rachel, J.(2007), â€˜Utilitarianism; for and againstâ€™, Havard Journal Of Business Affairs, pp. 56 Source document
Costco Wholesale Essay
1. Executive Summary
Costco Wholesale Corporation founded in 1983 by Jim Sinegal in Seatle Washington with a vision mission â€œto continually provide members with quality of goods and services at the lowest possible price control inventory.â€ Part of their strategy include direct buying relationship that ensures an efficient strong SC management, high standard staffing plans, high quality products at lower prices and assessable to members who are considered more loyal. Efforts are made to develop strategic options in line with these strategies while focusing on the supply chain parameters that span from order placement to receipt of goods at the warehouse and made available to customers in the warehouse shop floor using the most cost effective processes in order to ensure they support the mission of the company.
By assessing Costcoâ€™s external opportunities and threats as well as the internal strengths and weaknesses (using SWOT Porterâ€™s Five Forces analysis), one can infer they are doing well within their industry. More options were generated to increase sales and awareness of the retail warehouses. The report concludes with recommendations for Costco to sustain itâ€™s market edge and advance by expanding into the European Asian markets more as their presence is still very weak in these regions as well as add other services goods to their already existing list.
2. Introduction Costco Wholesale Corporation founded in 1983 within the retail industry is the largest warehouse club in the world based on sales volume. A major wholesale business offering three levels of membership and the largest wholesale club operator in the US with membership/warehouse locations spread across Asia, Europe, North South America with headquarters based in Washington, US. Their main competitors operating membership warehouses include Samâ€™s Club BJâ€™s wholesale club. Jim Sinegal, the founder defines the company vision as â€œgiving the best to the customer at the best value possibleâ€. Here best value (in quality of goods services offered) at low prices are the driving force. Costco backs up itâ€™s products with a return policy within a time frame of average 90 days, a highly endearing attraction to itâ€™s members.
The business model focuses on low prices volume purchase in order to achieve profit at low margin with stores offering discounts on an average of 4,000 products out of which roughly a thousand are â€˜treasure huntâ€™ referring to goods that are scarcely available for purchase always. Volume purchase from few vendors yielding further reduction in price and lowers cost in marketing. With low prices, quality goods in limited selection based on forecast lead to quick turnover in inventory. The high volume purchase and efficient network distribution yield efficiency in operations for Costco. With a stipulated membership fee, Costco warehouses are designed to help small to medium size businesses reduce purchasing costs as well as serving large families with the goods packaged in bulk ranging from alcoholic beverages, electronics, fresh food/produce, household office supplies, pharmaceuticals tires. Also available are special memberships with services like car home insurance, mortgage and real estate services, and packages for travels.
3.Purpose and Main Areas Of the Research (Concepts Techniques) Analyzing the supply chain operations at Costco wholesales, in line with the business focus while limiting to itâ€™s supply chain operations strategy for maintaining a competitive edge as it relates to SC operations (from sourcing to arrival on pallets and or display at their various warehouses racks), their challenges and options for improvement will be the focus of this report.
The following issues will form questions that will give a frame for this report: â€¢ What are the key issues facing Costco in line with (efficient) Supply Chain Operations? â€¢ What would be options to compete with these issues?Â â€¢ Which options best suits the business focus and would yield better growth financially?
The sections thereafter will consider trying to answer the questions above by applying SWOT analysis (see appendix 1) and Porterâ€™s five forces framework (see appendix 2). Areas needing improvement will be obvious from such, options that would generate better performance after localizing issues peculiar to Costco. These would ultimately lead to clear recommendations for Costcoâ€™s improvement.
Due to inaccessibility of authentic and current data for successive years on sales, further analysis could not be carried out to compare Costco for accurate sales assessment in the last three years or compare with the other two leading club wholesalers (Samâ€™s BJs).
Identifying, analyzing key parameters with Supply chain operations processes at Costco and suggest areas of possible improvement.
Inventory Management: Since good are moved straight to the selling floor and inventory is not held by Costco but managed by vendors, inventory labor cost of handling is avoided. In their meat grocery section for instance, they focus on low-price high volume strategies hence, Costco carry very limited amounts of grocery perishables whereas Wal-Mart is known to have weakness in the area of perishables (Petrak, 2006)
Partnership/Collaboration with suppliers: Costco has buying relationships with many producers of national brands and are supplied directly from suppliers routing to the warehouses of docking points that serve as distribution points. Partnership market is an attribute of Costco, for instance by partnering with American Express to create a Costco-AMEX credit card, discounts cash cards as offered to customers while Costco markets Amex cards, thereby helping them to acquire more customers.
Distribution Strategies/Transportation: The redesign of product packages to fit into pallets and thereby maximize space has led to reduction of trucks used to transport goods. Cross-docking of goods by delivering directly to Costco stores while some are kept in the distribution centers saves a lot of time cost along the SC. Utilization of buzzers for truck drives at delivery points to indicate when trucks have been unloaded can save time as against the truck driverâ€™s physical movement within the warehouse is a time saver. Their warehouses are not situated on prime locations hence cost is saved from unnecessary high property cost; again, they own over 80% of the warehouses.
Green Logistics: Costco Kirkland signature has launched eco friendly cleaning products. It maximizes the use of solar power in itâ€™s warehouses, itâ€™s delivery trucks are better packaged to allow maximization of space so as to reduce fleets of transportation and hence environmental pollution. Energy is better conserved with timed lighting and construction of warehouses that can maximize skylight during the day. Food products are packaged in recyclable and more environmentally friendly materials. Customers are paid to recycle their old electronics at the green sight.
Information Technology: This retailer prides itself in itâ€™s connection of all warehouses to the headquarters in Washington. By using the EFIM which provides real time information, manages control systems and inventory management system. The ECR is used to achieve profitability, improvement in efficiency, logistics, procurement and overall cost control. Kumar (2008) records that approximately $6 billion in a year is lost in the USA by supermarkets due to out of stock products among 25 top retailers as a result of inefficiency in their logistics.
Vertical Integration: Costco practices a partial vertical integration with itâ€™s cross-dock distribution. By gaining control of either its inputs or its outputs or both in sourcing directly from suppliers they have more control over innovation delivery of those services. Cost is also reduced which is ultimately transferred to customers.
Further optimization of operational performance through SC operations options that can sustain a competitive edge and improve customer satisfaction through service improvement and cost reduction.
4. Description Of The Separate Areas 4.1Description of The SC Operations Performance Improvement. The measurement of SC performance can be based on profit, customer service or sales maximization (Chow, 1994). While the traditional method majorly measured product costs, identification of costs related to customer service is key. Elimination of various extraneous costs like plastic shopping bags, fewer shop floor staff, limited product variety brands on shelf and also slowing down on capital expenditure like expansion, Costco has been able to focus on improving buying power for achieving greater output. Since inventory rates are quickly turned over, payments to suppliers is fast tracked hence they are able to benefit from discounted early payments. Cost is involved in sourcing products from suppliers, shipment to depots warehouses, distribution to warehouses storage in inventory.
By considering the concept of avoidable cost (possibly considering packaging storage), efforts can be made to improve on SC performance by implementing better SC integration program. Partnering with more suppliers and or service providers for better flow of operations as well as building keener competition can enhance better efficiency leading to more profit in the long run. More side business services can be added at Costco like money order and cash transfers to attract more customers and make Costco a one stop store. Aside from email messages being sent to existing members on promotions, greater awareness can create a more organized means to lure more customers on the expanding array of products services such that new more revenue streams are attained.
4.2 Issues Affecting Supply Chain and Possible Solutions Analysis of SC at Costco using SWOT analysis (appendix 1) reveals Costco is doing really well. Growth opportunities exist for business by entering the European Asian markets as these have not been exploited. From present methods of operations, the high staff salary and low margins maintenance amongst other issues need to be looked into for future prospects. The aging and close exit of the CEO along with growing competition and other threats in intended foreign markets such as political and religious wars, foreign exchange bank issues are threats to consider.
In dealing with these issues, it will be important to assess briefly lead time management, product handling, transportation, quality, inventory as well as possible process solutions. Where possible, promotions should be done to enhance more sales though with the low prices and already highlighted low margin high employee, this may eat into the profitability but if well planned can create more publicity for the company which can yield quick inventory turnover. Since low overhead tight operation is the practice, better savings can be passed on to customers in form of promotion or otherwise.
Exploration of overseas market is still a strong force and will yield greater profit considering the existing reputation Costco has and understudying how business is executed in such regions. Development of more private labels on wider product range and increased focus on customer loyalty programs are worth considering as well. It is advisable the board of management put in place a business plan before the exit/retirement of the CEO.
Porters Five Forces analysis (see appendix 2) could identify an overall attractive industry, with the following power and threat situation: The buyer power was determined to have a positive potential impact on Costco business as it portray that buyers have the requisite level of expendable incomes to provide effective demand for goods services. In a similar manner, low threat of new entrants and substitute products portray an attractive industry whereas moderate internal rivalry and supplier power have a positive impact on Costco operations as it kept the company alert and devoid of complacency.
4.3 Analyzing The Contribution Of SCOM to Competitive Business Performance To further highlight the role of SCOM in enhancing business performance and maintaining a competitive edge, a few activities like volume purchasing, efficient packaging distribution, supplier integration customer integration have contributed to give a close picture of Costco capabilities and business level performance with each activity having unique benefits and detriments. Again, constant review of SCM practices may further help management in Costco to further match demand with SC requirements like efficient, lean SC (Cook et al , 2011). Their Network design, JIT resource planning distribution, optimization of transport replenishment policies have impacted positively and should be subject to constant review for sustaining a competitive edge.
Finally, it is believed that some useful contributions are being developed to improve supply chain and itâ€™s operation in line with the objective of Costco in delivering quality at lowest cost to customers on time with the aim of sustaining a more competitive advantage. Some useful SC options have been suggested above which support these objectives. While the ultimate goal remains to sustainably increase market share by achieving more qualitative growth and at the same time expand on the earning base through exploitation of the European market and already existing markets, Mascarehas et al (2004) adds that â€œcompetitive advantage must be won again and againâ€ in other words, giving the current ever changing business world we live in, customer tastes and priorities are changing hence the need for Costco to be better positioned in order to respond always to itâ€™s members needs while expanding on new fronts.
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