What Is Home Depot's Culture?

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Home Depot Case Joe Jasso Case 6-12 BMKT 6308 Maximizing Customer Value Fall I 2015 Dr. Ryan Lunsford Abstract The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank. The vision they had was to offer a one-stop shop for the do-it-yourselfer. The original stores were large warehouses that overwhelmed the competition with buildings that were over 60,000 square feet and stocked more than 25,000 SKUs (Home Depot, 2015) Its strategy was to offer the best customer service experience by being able to walk customers through projects, such as how to lay flooring or how to handle a power tool. The company grew very quickly to become the fastest retailer in history to reach sales milestones of $30 billion, $40 billion,…show more content…
The cultural overhaul took Home Depot in a different direction from its competitor Lowe’s, where managers “describe the atmosphere as demanding but low profile, collaborative, and collegial (Craves & Piercy, 2013). This was mainly due to Nardelli’s military influences, in which he instilled formal military-hiring programs. This work environment led to employee empowerment. Managers were given autonomy to makes valued based decisions instead of having to look upward for an answer. Unfortunately, no everyone had embraced his cultural makeover. BusinessWeek spoke to 11 former executives, who described the cultural makeover as demoralizing staff and led to a culture of fear which caused the home improvement giant customer service to falter (Cravens & Piercy,…show more content…
His vision was to enter into a new market, but at the same time dominate the home supply business. This was an undertaking that needed more planning and resources. As a result, he launched the Home Depot Supply initiative. This undertaking may have been more successful during his reign, had he paid more attention and focus on dominating its existing business. His second initiative proved to provide value for the company with the launching of its innovation center. This opened the doors to product innovation and allowed management to look for new ways to compete in the market. Nardelli’s “command and control” management style provided an environment where managers and employees were empowered to make decisions that impacted the customer, but at the same time created a culture of fear if performance results were not meant. This approach had a negative impact on customer service ratings which is what prompted a change in leadership. By 2005, customer satisfaction at the Home Depot fell to 67, becoming the worst performing retailer on the American Customer Satisfaction Index (ACSI) that year (Fornell, 2007). As a result, Frank Blake took over as CEO and was described as the “calmer-in chief” rather than the “command-and-control” of his
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