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Sunday, February 7, 2010

Home Depots Organizational Politics and Power

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The Home Depot’s

The Home Depot ‘s Organizational Politics and Power
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The Home Depot’s Organizational Politics and Power

Being one of the model and one of the most successful home improvements and products retailer in the world, Home Depot can be a benchmark when a business entity or a business organization is being talked about. The company is also “well known for its entrepreneurial and laissez-faire culture, a culture fostered by co-founders Bernie Marcus and Arthur Blank, who led the company from 1978 to 2000.” (Home Depot’s, 2004)

Being such a big organization, various perceptions are made towards its organizational politics and power. In fact a big leap for this issue happened in 2000 when Robert Nardelli was appointed as the CEO of the company and everyone around considered him as a “veteran” (Freeman, 2007). Nardelli was claimed to be responsible for Home Depots change of culture. Since there is a changing demand for better leadership and management, politics and power are at constant change in an organization.

Centralization of power is how the Company’s organizational structure is designed. It means that the ultimate decision and power relies with the highest echelon of management going up to the Board of Directors. Home Depot, according to one of its Stores Vice President, “retains its entrepreneurial spirit with the benefits of a centralized leadership team. “ (Taylor, 2008) However, centralized as it may be, Home Depot is a flexible organization that does not hesitate to find for the best people to its organization. This means that even the best of the officers must perform to their greatest capacity in order to stay in their power and retain their respective position. It is because Home Depot, aside from Dell Computer, Starbucks Coffee and Nike have been said to have market leadership with “the success of change leaders.” (Wilson, 2003, p. 45)

Contrastingly, although leaders can be changed in case of a certain need of the Organization, while they are at power, the leaders and officers still have the stronghold as to the decisions that the Company makes. Adding the fact that Home Depot has a “military” style of management since Nardelli’s appointment, it is a very disciplined organization for that matter.

In 2005, The Home Depot hired 17,000 military job seekers, including veterans, separating active duty service members, National Guard members, reservists and military spouses, through Operation Career Front. Operation Career Front provides career opportunities for current and former members of America’s military community, military spouses and other dependants. (The Home Depot)

It means that Home Depot has a "more rule-based governance of the workforce" (Estlund, 2003, p. 41) and productivity is encouraged and increased in this manner of management. The bad effect? “The change in gears was shocking to a lot of people who were accustomed to Bernie's laid-back style” (The Home Depot, 2008) in the Company.

With the departure of Nardelli however in January 2007, Home Depot must adapt with another set of changes: another set of policies as well as power struggles within its high echelon officers as well as adjustments needed by all its personnel and employees. With Frank Blake’s succession after January 3, 2007 Home Depot was in overhaul again when Nardelli ceased to be “the right guy” (Parija B. Kavilanz, 2007) for Home Depot.

Although the power has changed, little changes have been expected with Blake and according Hoff, a retailing analyst, as stated in USA TODAY, “the only difference is that Blake is not Nardelli” ( Jones & Krantz, 2007). This means that discipline within the organization is still intact.

Estlund, C. (2003). Working Together : How Workplace Bonds Strengthen a Diverse Democracy /. New York: Oxford University Press.

Freeman, S. (2007, August). Chrysler Hires A Fix-It Man. Washington Post, p. D01. Retrieved August 6, 2008 from

“Home Depot's Cultural Evolution - A comparison of the Company's Culture Under ITS Founders and BOB Nardelli”. (2004). Retrieved August 6, 2008 from

Jones & Krantz. (2007, January). Home Depot Boots CEO Nardelli. The USA Today. Retrieved August 6, 2008 from http://www.usatoday.com/money/industries/retail/2007-01-03-hd-nardelli_x.htm>.

Kavilanz, P.B. (2007). Nardelli out at Home. CNN Money. Retrieved August 6, 2008 from http://money.cnn.com/2007/01/03/news/companies/home_depot/index.htm

“Quarterly Earnings Releases”. (2008). The Home Depot Website. Quarterly Earnings Retrieved August 6, 2008 from

The Home Depot and Military. (2008). The Home Depot Website. Retrieved August 6, 2008 from

Wilson, I. (2003). The Subtle Art of Strategy: Organizational Planning in Uncertain Times. Westport, CT: Praeger.

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