Home Depot: Organization Design and Culture - Essay Example

? Organization Design and Culture Question Organization design or organizational structure can be defined as the coordination of both the individual and group work within an organization. Individual work should be managed and coordinated in order to achieve the organizational future objectives and goals. This essay will outline organizational design, leadership skills and managerial task of Home Depot. Home Depot is one of the leading American Retailer that provides home construction and improvement and products and services. This part of the essay will discuss about the organizational design tools of Home Depot. Earlier Home Depot was following decentralized organizational process. Due to increasing competition within the market place the organization decided to bring change in the organizational design. They transformed to centralization process in order to concentrate the decision making authority at the higher levels within the organization. Maintain appropriate balance between the centralization and decentralization process is huge challenge for several leading global organizations. Home Depot is one of the global retail giant. The organization has more than 2000 retail stores across the globe (Griffin, 2007). This centralization process allows the store managers to undertake several decisions independently and autonomously. Therefore, it can be stated that each retail outlet of Home Depot has entrepreneurial work culture. This process helped to save lot of money and increase business productivity. This centralization process helps the company to reduce operational cost as the company negotiates effective discounts from the existing suppliers. Home Depot follows flatter organizational hierarchy. The organizational hierarchy of Home Depot consists of few layers. Flatter organizational hierarchy helps an organization to provide its employees huge level of self actualization and greater satisfaction needs. At the same point of time there are several disadvantages too. Due to limited management layers, this organizational structure cannot provide effective advancement opportunity to the employees. Home Depot implemented multidivisional structure in their departmentalization process. This divisional structure helps to represent several unique employees, geographic locations, customers, products and services for the organizations. For an example, a marketing executive within an organization with a divisional organizational structure may be in the charge of promotional planning, and scheduling and executing a marketing research for a particular product line controlled by that executive’s division. Formalization structure is one of the important and effective tools of Home Depot’s organizational design. Formalization structure helps to develop effective rules and regulations. It controls the employee behavior. This formalization structure helped Home Depot to provide the organizational direction to the employees. Due to this structure the employee behavior becomes more predictable. This structure helps the employees to follow the specific guideline or legal organizational procedure of an organization in a critical situation. This strategy is generally utilized in the service industry. Mechanism structure is another organizational design tool of Home Depot. This organizational structural tool is very much centralized and formalized. Home Depot follows formal communication process with the help of this structure. This structure forces the employees to follow discipline and take effective responsibility depending upon the job role. This structure helps an organization to maximize the organizational efficiency and minimize the operational cost. Question 2 Home Depot employed an effective corporate culture in order to support the business strategies. The organization follows cluster strategy to utilize the work group in the organization. It helps to accomplish the future goals and objectives of the organization. The managers help the employees to work collaboratively. The store managers divide the workforce into several small groups. It helps to track the products and customers quite effectively. Effective service to the customers has increased the image of the organization in the mind of the target customers. At the beginning of the day, the store managers provide cluster training to the employees. This strategy helps the employees to perform according to the daily projection. Effective performance of the small work groups helps Home Depot to accomplish the goals and objectives. Question 3 Home Depot is one of the leading retail chains in global market. The organization implemented several effective employee motivational strategies in order to promote better strategy execution. Effective performance appraisal and reward system helps the employees to perform effectively. The organization provides effective induction and training process to their new employees. It helps the employees of Home Depot to increase their self confidence level. The bonus and incentive plan motivates the employees to provide better performance. Home Depot always provides bonus based to the employees on the basis of performance on quarterly basis. In addition, effective employee motivation process helps the organization to achieve organizational goals and objectives. Question 4 Effective organizational structure is the key reason behind the success of Home Depot. The organization always tries to provide effective customer services and quality products. It has been discussed earlier that it is one of the leading retail chains in the global market. Home Depot depends on the employees in order to achieve effective business output. Starting from employee induction to performance evaluation of the employees, the organization follows several systematic processes. The organization follows a unique organizational structure. High business ethics and effective organizational culture motivates its employees to work effectively. According to the organizational value of Home Depot, the organization provides rewards to their employees based on the performance level. Moreover, the organization provides bonus to the employees in the festive seasons. Quarterly performance evaluation helps the managers to track the performance level of the employees. The organization always motivates the under achieved employees in order to increase their performance and productivity. Home Depot feels that only satisfied and motivated employees can provide effective performance. Therefore, the organization focuses on the employee reward and incentive system. Effective reward and incentive structure forces the employees to increase the level of performance in order to achieve high productivity and performance target. It will help the employees to make them eligible for the rewards and incentives. Question 5 Effective evaluation and feedback process helps Home Depot to assess the performance of the employees. According to the employees Home Depot is the healthy place to work. Effective collaborative work process increased the significance of the organization. The managers generally conduct employee review, evaluation and feedback process on quarterly basis. The managers follow high organizational ethics and transparency in the evaluation and feedback process (Garcia, Huntsman & Blanchard, 2012). There are two types of incentive plan that are used in the organization, such as profit sharing and gain sharing. Home Depot implemented profit sharing process. This strategy helped the organization to share some percentage of business profit with the employees. Effective evaluation process has helped the organization to assess the performance of its employees. Most importantly, the organization measures the performance of a total group or team of employees. There is no such concept like individual performance appraisal. Question 6 In the year 2002, Home Depot had implemented a cultural change process by appointing Bob Nardelli as the new CEO. Due to intense competition within the market place, the organization was forced to make a change in the organizational structure. This change process was implemented in order to motivate the employees to improve the performance of the organization. Major objective of this change process was to centralize and streamline the purchasing activities. The new change structure brought significant result at the end. Nardelli developed a new effective bonus system based on the performance level of the managers and store employees. The organization has introduced several new products to develop a potential customer base around the globe. Moreover, Home Depot tried to implement advanced technology in their business process in order to increase the business efficiency. At initial stage the organization faced several problems. Implementation of change process affected the motivation level of the employee. Most importantly this process discouraged the employees to engage in the decision making process. However, effective management, monitoring and controlling process helps the organization to maintain a healthy work environment. Question 7 The ethical model of Home Depot is quite significant and interesting. The organization follows effective ethics in their business and organizational process. It is true that the organization made a change in their decision making process due to intense competition within the global market place. They have implemented centralized organizational structure in order to achieve discount from its suppliers. However, Home Depot follows high organizational ethics and transparency in the employee evaluation and feedback process. The organization always tries to maintain their organizational value in their business process. This strategy has brought the sustainability in their business. Several sustainable business practices like reduction of carbon emission, implementation of advanced technology in order to reduce green house gas emission increased brand image and brand reputation. Effective performance appraisal of the employees and providing effective rewards and bonus to the employees for the effective performance made the employees happy. Question 8 Home Depot integrated a dynamic corporate strategy in order to sustain rapid expansion. This effective corporate strategy is the major reason behind the significant growth of Home Depot (Ferrell, Fraedrich & Ferrell, 2011). This organization has implemented concentration, growth and horizontal strategy to achieve business growth. Home Depot tries to expand their product line in all the potential geographic locations around the globe. For an example, the organization penetrated the potential global market throughout the Sunbelt of US. The divisional structure of Home Depot helps to represent several unique employees, geographic locations, customers, products and services for the organizations Home Depot developed several Expo Centers in the global market place. This Expo center is an effective market niche. It targets the upscale home owners by implementing CAD. It helps the organization to offer innovative and attractive kitchen appliances. Question 9 Home Depot tries to ensure that all the senior employees within the organization should work towards the same organizational objectives and goals. Bringing down the organizational goals to the individual level such as green house gas reduction, effective customer services helps the employees of Home Depot to understand their roles and responsibilities in achieving the superior and broader goals of the organizations. The hard work and responsibility of the middle and junior managers help to guide the junior employees. Moreover, this creates a sense of empowerment among the employees. The organization follows a unique organizational structure. High business ethics and effective organizational culture motivates its employees to work effectively. Moreover, the effective training process, motivation process and guidance process helped the employees to work with self confidence and high motivation within the organization. References Ferrell, O., Fraedrich, J., & Ferrell, L. (2011). Business Ethics: Ethical Decision Making and Cases. Stamford: Cengage Learning. Garcia, H., Huntsman, J., & Blanchard, K. (2012). Building Success with Business Ethics: Advice from Business. New Jersey: Pearson. Griffin, R. (2007). Fundamentals of Management. Stamford: Cengage Learning. Read More