A Centralized Structure Transforms. Home Depot Essay

1060 Words Jul 22nd, 2013 5 Pages
In 1979 Bernie Marcus and Arthur Black opened their first Home Depot store in Atlanta, GA. The mission of Home Depot was to create a superstore for home improvement that would offer customers a variety of products at a low price that other hardware stores would not be able to match. Managers were able to order and stock products that meet the needs of their local and regional customers. Jones (as cited by Pearson, 2013) states “when the authority to make important decisions about organizational resources and to initiate new projects is delegated to managers at all levels in the hierarchy, authority is highly decentralized” (p 126). The decentralized organizational structured worked well for Home Depot until the early 2000s when Home …show more content…
Nardelli knew that he may receive resistant from the employees in the change of structure. Nardelli would need to recreate the culture within the company to be able to bring the company back to the top. Nardelli brought personal leadership and accountability to the organization through his own behavior. He also created specific tools to change the company’s culture which were created by Dennis Donovan a previous colleague of Nardelli from GE. Nardelli placed a trusted colleague in a position that lacked influence in previous years at Home Depot. Donovan was one of the highest paid executives which signaled that changing the culture within Home Depot was an essential part to making the company successful in the years to come. Ram Charan an employee during this time made two significant points about this time. He states that “ these changes in the business would not have happened without a real and observable change in the culture….cultural transition can be achieved systematically, even under less than favorable conditions, not simply through the charisma of the person leading the change but through the use of mechanisms that alter the social interactions of people in the organization”. (2006) Within 18 months, the new organization structure was paying off and sales increased as customers enjoyed the new products and better customer service.

Discussion Questions Decentralizing can help Home

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