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Home Depot

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MIDTERM – THE HOME DEPOT’S
ORGANIZATIONAL COMMUNICATION
Organization Communications
Mgmt 305
Potomac College

Abstract
This paper will analyze the culture of The Home Depot and its communication practices. This will be accomplished by examining the dimensions of the organization’s structure. The Home Depot’s sociability, power distribution and job autonomy, degree of structure, achievement rewards, opportunities for growth, tolerance for risk and change, conflict tolerance, and emotional support will be used to determine if the organization has a Theory Y culture.
Introduction
Home Depot is considered to be one of the top ranking home improvement organizations. The mission statement of this organization was formulated around being “committed to maximizing long term shareholder value while supporting management in the business and operations of the company, observing the highest ethical standards and adhering to the laws of the jurisdictions within which the company operates” (Homer TLC INC, 2010). The Home Depot transformed the “home improvement industry” by providing a well round reputation for products, corporate governance and strong values within the community. The purpose of The Home Depot remains to build relationships, have social responsibility, and concrete ethics as an organization. Employees are respected, offered growth and reputable incentive plans. Public policy makers and Home Depot collaborates on ideas to assure prosperity in our society. Home Depot delivers great customer service by revealing the best techniques in home improvement for amateur clientele. There are over 2,200 retail stores in the United States and 272 internationally. Overall, these features promote essential organizational communication dynamics. Organizational communication sets the organization apart from the rest. This also promotes a clear understanding of cultural dimensions.
Home Depot History

Founded in 1978, The Home Depot, Inc. is the world's largest home improvement specialty retailer and the fourth largest retailer in the United States with fiscal 2010 retail sales of $68.0 billion and earnings from continuing operations of $3.3 billion. The Home Depot has more than 2,200 retail stores in the United States (including Puerto Rico and the U.S. Virgin Islands and the territory of Guam), Canada, Mexico and China. The Home Depot employs over 255,000 associates, and operates 478 warehouses.
The Home Depot is the fastest growing retailer in U.S. history. In 1981, the company went public on NASDAQ and moved to the New York Stock Exchange in 1984. The 1980s and 1990s spawned tremendous growth for the company, with 1989 marking the celebration of its 100th store opening. From the beginning, The Home Depot developed strategic product alliances directly with industry-leading manufacturers to deliver the most exclusive assortments to customers. Through a combination of national brands and proprietary products the company sets the standard for innovative merchandise for the do-it-yourselfer
From the start, associates were able to offer the best customer service in the industry, guiding customers through projects such as laying tile, changing a fill valve or handling a power tool. Not only did store associates undergo rigorous product knowledge training, but they also began offering clinics so customers could learn how to do it themselves. The Home Depot revolutionized the home improvement industry by bringing the know-how and the tools to the consumer and by saving them money. Home Depot History
Bernard March, Arthur Blank and Ronal Brill incorporated the Home Depot in 1978. They found financing from a New York venture capital firm and started Home Depot in Atlanta, Georgia.
This team Recognizing that more than 60% of building supply industry sales were do-it-yourselfers and that most did not have the precise knowledge to successfully accomplish home repair or home improvement projects themselves; Home Depot opted to offer that service to the public. The management team of Home Depot devised a two part plans to insure success.
1. Ensure the Home Depot had ampule stock; their target was at least 25,000 items.
2. Train sales staff in every store to be product knowledgeable.
They also wanted to make the experience of shopping at Home Depot and experience that would bring you back to the store for additional sales and expert services.
The Home Depot story is one of success due to clever thinking and good ideas. Today they are involved in the upscale interior design market, and taking on some leadership roles in the communities that their stores have entered. They have also become involved in humanitarian efforts such as local welfare organizations, Habitat for Humanity to the Boys and Girls Club of Canada and the United States.

Bob Nardelli is Watching

Bernie Marcus and Arthur Blank left their posts without any warning. There wasn’t any evidence or indication that the founders would leave Home Depot. Employee morale was high and customer service was great! Expansion of the company was going along wonderfully and there was no doubt that Home Depot was a contender in the home improvement industry. Home Depot needed a major revamping and few people knew about the financial state of the company. Marcus and Blank allowed a very disjointed culture to exist within the company. Bernie Marcus and Arthur Blank, the founders of Home Depot, had paved a road to bankrupt the company.
In comes Bob Nardelli to save the day. The Home Depot board of directors sought after Bob, once he was passed over for the top position at GE. Immediately upon taking over as CEO, Nardelli started to centralize processes. This proved to be extremely radical for existing personnel. Bob upgraded computers, software, and hired a Director of Human Resources, which Home Depot had never had before. Nardelli started a recruitment program, which had been very successful for him at GE. He focused on retirees, Hispanics, and military officers. Walking into a culture where there was little to no structure, Nardelli knew that he would need personnel that would “understand the mission,” (Regingold 2007) which is why there are so many employees with military experience. Nardelli brought discipline to Home Depot. Under Bob Nardelli, Home Depot doubled their sales, opened a contractor’s sales division, and boosted Home Depot’s commitment to volunteerism. Frank Blake is Home Depot's 'Calmer-in-Chief'
Almost immediately after assuming the role of CEO, Frank Blake used The Home Depot’s existing intra-communication system to read to the employees from a book written by the founders. This gesture set the tone for his leadership style and relayed a clear message to the employees, The Home Depot was returning to their grass roots leadership style. Blake intended to “recapture some of the culture fostered by its founders. It also syncs with his push to get the company back to its service-oriented roots.” (Tobin, 2010)
Blake is described as mellow and a sharp contrast to his predecessor, Bob Nardelli, who is portrayed as emotionally high strung. Unfortunately Blake was given the daunting task of having to lay off thousands of people, close stores and spearhead and internal restructuring. Although Blake has improved employee morale and customer satisfaction, “Home Depot still lags archrival Lowe's and smaller hardware stores for customer service, according to external surveys. And the housing market that fueled the chain's growth remains moribund, leaving much on Blake's plate.” (Tobin, 2010) In contrast, Home Depots claims that their internal surveys show that employee morale and customer satisfaction are up.
“By most accounts, Home Depot needed cultural healing when Blake was named chief executive.” (Tobin, 2010) As CEO, Blake sought the advice of consultants like Marcus and Blank and embraced their motivational techniques as demonstrated this by allowing them to speak annually with his management team. Blake has accomplished reestablishing the organizational culture that was dismantled under Bob Nardelli.
Home Depot Foundation
The Home Depot Foundation was created to help those who are having financial difficulties with home improvements and repairs. The Home Depot Foundation decided to contribute $30 million to our veterans who are struggling with significant financial concerns. The Home Depot Foundation has also teamed up with “Gift In Kind International” to address financially disadvantage families. A noticeable goal within this project delivers lower energy cost and consumption. A contribution of $100 million for supplies or products was noted for donation across non-profit agencies since 2008 on a national level (Homer TLC INC, 2011). The “Framing Hope Program” was also noted as assisting with home repair or improvement through Home Depot. Home Depot provides non-profit agencies or organizations material that is discontinued from stock. This business transaction offers a win-win scenario for all parties involved. The shareholders and Home Depot give resources to those in the community in need and avoid landfills being occupied. Landfills are designed to bury trash underground. The trash has a supportive barrier to prevent it from leaking into our ground water. However, eliminating the overflow of this process is an eco- friendly suggestion. This benefits the environment and business strategic management objectives. Most of the companies being used are Fortune 100 organizations in the United States. Close to $270 Million has been donated to programs that support families in need. The Home Depot Foundation and the Gifts of Kind International have assisted thousands of families in need. These organizational leaders show that their organizational values and culture are productive in nature. The reputation of Home Depot and those that are similar, demonstrate strength in its business model.
Theory
Research states that The Home Depot is one of the best companies to work for with a high customer focus, great product selection, high employee morale, and an entrepreneurial spirit. The key to The Home Depot’s success is treating people well. Associates are encouraged to share the company’s vision on volunteerism and participate in the many causes that The Home Depot supports in the community and in society. The Home Depot uses their values to guide the beliefs and actions of all associates on a daily basis. These values are The Home Depot’s advantage in the global marketplace. Theory: The Home Depot is a Theory Y organization because employees are encouraged to speak up and take risks, they are recognized and rewarded for good performance, and they are provided with leadership and development so that they can grow.

Evaluation and Measurement of Organizational Culture
Examination of an organizations ability to communicate within its culture is vital for success. The Home Depot has proven that it holds the record for being a reputable organization among competitive industry peers. The Home Depot functions as a “Theory Y” organization according to how the management responds to operational goals, employees and production.
The Home Depot uses teleconferencing to immediately reach associates. This proved to be a great tool when Frank Blake took over as CEO after Bob Nardelli. Nardelli was a leader that provided structure and streamlined processes, and at the time of Bob’s arrival The Home Depot needed both. Nardelli did not include customers and associate morale in his vision for the company. Nardelli ran the company with military precision and this created a climate of fear. On his first day as CEO, Arthur Blake read from a copy of “Built from Scratch,” the company biography written by The Home Depot founders, Bernie Marcus and Arthur Blank. Using this channel to communicate with the company allowed Blake to send the message that, “We are who we are, because of the way that things were done in the beginning.” Choosing this channel of communication at this time gave Blake a chance to start the healing process at The Home Depot. This showed a small degree of power distance within the organization. Every employee had been through radical changes with the former CEO and everyone needed to know that things were going to be okay, and they needed to hear that from the CEO.
The Home Depot uses face-to-face channels of communication to encourage sociability. Diversity is encouraged within the employment population to generate a creative perspective. The diversity ranges from different cultures, out of country suppliers and divisional council groups. The morale of the those involved are high due to the focal point being to improve one’s community and growth of your own personal endeavors through training. These two factors encourage employees to be creative in handling outside community functions while feeling at ease with their responsibilities at work. The informal communication networks are established within this organization by means of group councils, Diversity panels, employee social functions, community interaction, being a team player, and a customer centered focus. There are copies of The Home Depot’s list of Values almost everywhere you turn throughout the organization. These rules are considered to be The Home Depot’s bread and butter. Writing the rules down and ensuring that there is mass distribution shows employees of the organization that the company is committed to the success of each employee. The Values state that good performance will be rewarded and associates will be developed so that they may grow. The Values also state that associates are to embody the “orangeblooded entrepreneurial spirit” of The Home Depot and take risks and initiate creative and innovative ways to serve the customers. The Values ask the associates to build strong relationships and to have respect for all people. These two requests prove that The Home Depot is tolerant of conflict but encourages solving the problem at the lowest level. The organization recognizes that there will be disagreements, and each associate is given the communication tools to operate effectively in any situation. References
Unknown. (2008). Douglas McGregor - Theory X Y. Retrieved 2011 йил 24-July from businessballs.com: http://www.nwlink.com/~donclark/leader/leadhb.html
Unknown. (n.d.). In the Community. Retrieved 2011 йил 21-July from corporate.homedepot.com: https://corporate.homedepot.com/wps/portal/!ut/p/c0/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gDdwNHH0sfE3M3AzMPJ8MAVxcDKNAvyHZUBABYurZs/
Unknown. (2001). Home Depot's Cultural Evolution - A comparison of the Company's Culture Under ITS Founders and BOB Nardelli. Retrieved 2011 йил 18-July from www.icmrindia.org: http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB063.htm
Unknown. (2011). The Home Depot Inc. From FundingUniverse.com: http://www.fundinguniverse.com/company-histories/The-Home-Depot-Inc-Company-History.html
FundingUniverse, . (2011). The Home Depot Inc. Retrieved from http://www.fundinguniverse.com/company-histories/The-Home-Depot-Inc-Company-History.html
Reingold, J. (2007, December 19). Bob Nardelli is Watching.
Retrieved July 10, 2011, from fastcompan.com: http://www.fastcompany.com/magazine/101/nardelli.html Homer TLC INC. (2010).
Home Depot: Values. Retrieved July 20, 2011, from Homer TLC INC: http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-govHighlights_pf

Weber, H. A. (2007 йил 5-January). Analysts: Home Depot must change culture. Retrieved 2011 йил 13-July from Boston.com: http://www.boston.com/news/education/higher/articles/2007/01/05/analysts_home_depot_must_change_culture/
Adler, R., & Rodman, G. (2008). Understanding Human Communication 10th Edition. USA: Oxford University Press.
Grow, B. (2009 йил 6-March). Renovating Home Depot. Retrieved 2011 йил 13-July from Businessweek.com: http://www.businessweek.com/magazine/content/06_10/b3974001.htm
Homer TLC INC. (2010). Corporate Governance Guidelines. Retrieved July 21, 2011, from Home Depot : Corporate Governance Overview: http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-govHighlights
Homer TLC INC. (2011). Home Depot Foundation. Retrieved July 22, 2011, from Home Depot Foundation: http://homedepotfoundation.org/news-resources/press-releases/2011/gifts-in-kind-international-and-the-home-depot-foundation-donate-$100-million-in-products-to-communities-in-need.html
Tobin, R. (2010 йил 4-September). Frank Blake is Home Depot's "Calmer in Chief". Retrieved 2011 йил 14-July from Seattletimes.nwsource.com: http://seattletimes.nwsource.com/html/businesstechnology/2012783334_homedepotprofilte05.html

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