Costco Yukl and Lepsinger (2002) Case Study

Although not my firm, I see this in a company like Palm. Once dominant in its industry, the minute the industry dynamic shifted with the introduction of a new product and a new competitor (the shift to smartphones and the entrance of Apple), Palm was unable to adapt to compete. Blackberry management was able to adapt and that company has continued to enjoy a strong market position, while Palm has all but disappeared. While this is an extreme example, it illustrates that there are few sources of sustainable competitive advantage, so leaders must be able to constantly find new ways for their firms to excel. This can sometimes imply significant changes to the business model, so the leader should not only be flexible but should be prepared to lead the organization through the process. The organization, therefore, should be responsive to the leader's demands for changes to company culture, processes and perspectives.

Human resources is probably the most important aspect of flexible leadership. Leaders rely on followers, which implies that if the followers are unable to deal with a flexible environment, so too will the leaders. Yukl and Lepsinger (2002) argue that organizations that place a higher priority on human resources will be more flexible, and better able to adapt to changes in the environmental conditions, leading to more rapid and complete changes in strategy.

My organization has long emphasized human resources as a key means to growth and profitability. This puts my organization in a good position with respect to being flexible. Our leadership has demonstrated the ability to understand the external environment and adapt to changes, and this rubs off on the staff. The team members look to the leadership and see that flexibility is a key source of strength for the company. This in turn implies that my organization is ready for flexible leadership.Costco is an interesting study in flexible leadership because the company appears to be flexible but its flexibility has never truly been tested. The company has made slight changes to its strategy in order to fend off competition and to strengthen its market position, however, and has been successful whenever it has needed to do this. The company is as flexible and adaptive as it needs to be in order to succeed. Sinegal's approach to management has emphasized expertise as a means of success, and part of gaining expertise is learning constantly. Costco's managers make subtle changes to their stores constantly, and never stop learning about the business. As a result, they are ready to meet any challenge, whether it is a major new competitor or simply a product that is not selling as well as expected.

The human resources policies at Costco are supportive of its flexibility as well. The company makes a point to pay its employees well -- it wants the best people, the ones most capable to making good decisions -- and is willing to do what it takes to retain those people. As a result, Costco supports its flexible leadership well, by bringing up managers through its ranks that all exhibit flexible leadership traits. The result of this is a company well prepared to meet whatever challenges it faces. My own organization shares these same traits with Costco, and has also enjoyed good results even in difficult times, something that characterizes the most flexible firms.

Works Cited:

Boyle, M. (2006). Why Costco is so addictive. Fortune. Retrieved April 10, 2011 from http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391725/index.htm

Yukl, G. & Lepsinger, R. (2002). Why flexible, adaptive leadership is essential for organizational effectiveness. Retrieved April 10, 2011 from www.oks.hio.no/ou/fagseminar/artikler/Yukl-Lepsinger.doc.....