Renovating Home Depot Essay

Words: 5084
Pages: 21

Question 1. Organizations as Complex Systems. (16 points). Using the 7S model, please identify two S’s that Mr. Nardelli has changed successfully, and two S’s that he has not changed successfully or is having trouble changing successfully (in that he is needing to replace a large number of people, etc. to accomplish the changes). For each, please name the “S” and in 2-3 sentences explain why you say that he has or has not changed the “S” successfully.

Home Depot had an enormous growth of achieving $40 billion in revenue in 20 years. However its sales started to stagnate, unable to cope up with the fast growth. Mr Nardelli identified some of the problems, key being appropriate structure and systems to support a strategic growth
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The recruitment was managed by local HR who had no experience in retail.
The employees did not understand or have a shared vision of where & why the organization was going, what are its tactical or strategic goals and how the company would achieve these objectives within the current culture or how retail and service industry would co-exist. They just saw dictates and decisions from the HQ that they felt compelled to execute.
Employees mocked at the slogans, constant drone of tips, warnings, and executive messages sent from HQ in an attempt to resurrect the “customer focus” reputation of Home Depot.

Not Changed Successfully 1: Name of the S: Skills

Retail industry requires high customer focus, hands on knowledge of the core products and high entrepreneurship that would help sales to engage customers and enhance sales. For high growth, certain centralized corporate functions and high collaboration or consistency across stores is required to increase margins and ensure standard customer experience.
Home Depot was known for its customer focus, hands on knowledge of sales folks in building houses and high empowerment to sales and stores managers to engage customers and increase sales. As Home Depot grew at a rapid pace, it required structure and systems to optimize costs and bring standardization across stores.
When Mr Nardelli took over as CEO, he had no retail experience and he did not spend time to understand the existing Home Depot