Home Depot Case Study

Topics: Robert Nardelli, Management, The Authority Pages: 5 (818 words) Published: September 1, 2014


Home Depot Case Study
Fabian Gonzalez
Great Basin College

Line and staff relationships consist of two types of authorities that work hand in hand in order for a company to work in an efficient manner. Line authority deals with the ability to make decisions over production, sales, or finance, while staff authority deals with the assisting of those who have line authority, by helping with the performance expected by workers (Certo). In the Home Depot case, the relationship between these two authorities, before CEO Nardelli, was unknowingly miscommunicated. Headquarters would apparently send out messages to these individual locations which were then overlooked or disregarded by store managers. They continued to have what is referred to as “do-it-yourself management” (Certo). The co-founders of the company would tell store managers to dismiss headquarter changes and do what they thought was best for their store. Tom Taylor, who joined the company, agreed that store managers were “aggressive and independent, pushing hard to build sales by giving local customers what they wanted” and included they were “a little bit rebellious, a little bit dangerous” (Certo). Authority was mainly in the control of the independent store managers. After Mr. Nardelli took over as Chief Executive, things started to change. He brought back the authority to headquarters staff by taking purchasing authorities away from store managers. He essentially brought back the communication throughout stores and throughout the individual managers via email which enabled the communicating of advice and the sharing of ideas (Certo). He refreshed the idea of cooperation within the corporation. Nardelli impacted the Home Depot franchise greatly. His influence and changes affected the corporation in a major way. He took away the “do-it-yourself” attitude from store operators and included the advice of many other authorities. This helped with the miscommunication involved. The CEO introduced a string of reports which ultimately lead to the manager’s focalization on performance and accountability. Although many managers were indifferent, Nardelli had an open opportunity to come into the company without having to stick to old trends. His changes essentially sold more high-profit items, enlarged sale size, and extended the corporation into new markets with great success (Certo).

In this Home Depot case, Nardelli knew that store managers were overlooking headquarters by instead doing what they thought was best. They strived for sales and the satisfying of local customers. They were aggressive and independent. In a sense, store managers had the right idea as far as satisfying the customer, but in their own way. They ignored any messages from the higher authorities which allowed very little opportunity for a teamwork effort. The corporate reporting is a procedure that is in place to assess a company’s sustainability (Lloyd). It has these structures made to accomplish performance while using company advices (Lloyd). Both areas are highly important. A company with poor customer satisfaction will tend to lose business. A company without a reporting system to evaluate company performance can also give negative results (Lloyd). There should always be a medium when managers are focusing on customers/reporting. It would be irresponsible for managers to emphasis solely on the customers and not following company guidelines while doing it. Responsible managers perform all obligated activities which includes following all company rules (Certo). In addition, they mustn’t focus all of their attention on company reporting and not enough on customer wants or needs. They should be priority in many cases. A responsible manager can be flexible in accommodating all areas of business.

Decentralization would refer to the process in which a high number of tasks along with authority are to be distributed throughout the work place to...

References: Certo, Samuel C., and S. Trevis. Certo. Modern Management: Concepts and Skills. Upper Saddle River, NJ: Pearson Prentice Hall, 2012. Print.
Lloyd 's Register. "Corporate Reporting Verification.". N.p., n.d. Web. 12 Mar. 2014. .
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