Organizational stakeholders - Essay Example

Organizational Stakeholders Organizational stakeholders are said to be those parties that have a direct interest in the performance of the organization, its position in the market, or its financial status. There are many stakeholders in a business and their interests may diverge and even conflict. Hence, a business has to find a way of satisfying these different interests. Some examples of stakeholders are shareholders, the workforce, customers and so on.Home Depot is the worlds largest home improvement store chain and the second largest retailer in the United States.

It was established in 1978 and is the number one retailer of home improvement and construction products and services. Home Depot being a company running on such a large scale has a great responsibility towards its stakeholders. Home Depots major stakeholders include its board of directors and shareholders/investors, the customers, employees and the suppliers.Bob Nardelli, the former chairman and chief executive of Home Depot contributed greatly towards the success and expansion of the organization.

Nardelli was a true leader and followed an autocratic approach. However, along with the positive changes that Nardelli brought with him, he also made some mistakes that greatly affective various stakeholders of the company. Nardelli was considered to have an arrogant and authoritative approach which was a cause for alienation of many stakeholders. Nardellis attempt on cutting down labor costs by hiring more part-time workers as compared to full-time lead to the loss of good workforce. This also lowered the morale of the existing workers.

Another one of his errors was the cut back of inventory budget which left the stores undersupplied and the customers dissatisfied. Nardellis attempt of increasing profit margin through demanding lower prices from suppliers led to the loss of significant vendors as they were not satisfied with the price offerings. Most importantly, Nardellis hefty pay was a great source of concern to shareholders and corporate governance groups and was prone to a lot criticism. Under the chairmanship of Nardelli, shareholders were not given the rights that they were entitled to and were not given an opportunity to speak up.

This shareholders matter led to the arousal of Nardellis credibility issues which made the investors lose trust in him and his management (Waters, 2007). This was one of the biggest set backs for him as the shareholders tend to hold immense influence on the organization.The present chairman and CEO of Home Depot is Frank Blake. Many analysts and investors did see how Blake could stand as being the successor of Nardelli. They feel that Blake does not posses the experience of running a company especially one that is in the retail industry.

Nevertheless, Blakes background is similar to that of Nardellis. Blake has leadership qualities and has experience in handling a large sector of an organization. However, Blakes democratic and more collaborative management style is different from Nardellis authoritative and abrasive leadership. This could prove as an advantage for Blake and would help in raising the morale of the workforce which has been dreaded by the culture of fear fashioned by Nardelli. Also, it is believed that Blake has a broader vision and perspective towards the market and where the company is heading.

Hence, he was considered as an ideal candidate to follow Nardelli. (Gogoi, 2007)Works CitedGogoi, Pallavi (2007). "Home Depots surprising choice for CEO." Business Week.MSNBC (2007). "Home Depot CEO Nardelli quits." MSNBC 5 Sep 2008 .Waters, Jennifer (2007). "Nardellis arrogance led to downfall at Home Depot." MarkteWatch. Accessed on 5 Sep 2008 from .