1. Based on the reading Do you have a well-designed organization assess Home Depots organizational design under Mr.

Nardelli (i.e., how good a job does Home D epots design do) along any five of the nine design tests discussed in the reading . For each test, name the test and then assess how well Home Depots organizationa l design under Mr. Nardelli meets the test. My assessment of the Organisation design Market Advantage Test: Bob Nardelli realised that Home Depot needed to focus bey ond the do it yourself retail segment and decided to concentrate on the business o f catering to professional contractors. He realised that this space was not crow ded and it could propel Home Depot into a market where there was a better chance for growth. Hence to cater to this new market segment, he set up a separate division called Home Depot Supply (HDS) to align the organisation structure to better focus on t his new market segment. In other words, he made sure that the organisation structure was in tune with hi s market strategy. Parenting Advantage Test: The corporate headquarters played a very important rol e in the functioning of each regional office/ store unit. The organisation struc ture supported a centralised chain of command from the senior management (parent ) and there was no confusion about assigned responsibilities. This ensured good coordination between the HQs objectives and the goals of each unit/store and it a llowed the Parent (HQ) to add value to each sub unit of the organisation. Hence the organisation structure succeeded on this test. People Test: Home Depot employed a large number of people from the military at l eadership level so much so that nearly 50% of the staff inducted in the leadersh ip training program was ex-military. These people worked best in a command-contr ol type organisation. Hence the organisation structure was designed to take adva ntage of the strength of its managers. The structure provided the correct report ing relationships which these ex-military personnel were trained to work with. Accountability Test: Each unit/store had specific controls in place to measure their performance. Each store manager had a plan (target) to benchmark his perfo rmance. There was no confusion about shared or fuzzy responsibilities. Specialist Cultures Test: I feel on this test Home Depot fails. The organisation design didnt encourage any specialist cultures. Every unit of the organisation w as expected to follow a uniform culture and there was no lee way for any autonom y. The major control rested with the Bob Nardelli and he didnt encourage any entr epreneurial activities amongst the units. 2. Please assess the approach to motivation taken by Mr. Nardelli and his senior management team using 5 motivation theories (NOTE: You may not use more than on e needs theory). For each of the theories, please state the name of the theory, discuss how its application is illustrated in Home Depots practices under Mr. Nar delli, and provide one example of practices/actions to support your assessment. Bob Nardellis motivation techniques drew heavily from the military culture he tri ed to ingrain into the organisation. He tried to create a war like atmosphere amon gst his employees and tried to motivate them with military slogans about winning the battle and out thinking the enemy (competition). McClellands Learned Needs theory: The senior management at Home Depot used the n eed for Achievement by setting the bar very high for their store managers. They set aggressive financial targets for their managers and this leveraged their dri ve to excel and inculcated a desire to win at all costs. Job Characteristics model: Senior management at Home depot used to the task sig nificance aspect of this model. The employees at Home depot were made to underst and that the tasks and targets assigned to them very crucial to the success of t he organisation. They were trained that every person, penny and product counts. Goal setting theory: Nardelli used this motivation theory most effectively. Eac

h store manager was assigned a plan and he was provided with weekly feedback on his performance against his plan. Each manager also knew that non-performers wou ld be weeded out. This way either a manger performed or he was forced out. Reinforcement Theory: The senior team at Home Depot relied a lot on this motiva tion strategy. Motivational messages, employee achievements, warnings, goals etc . were constantly played over Home Depot TV in the staff break rooms reinforcing the targets and warnings of the consequences of missing them. Once a week on e very Monday night, the senior management of Home Depot addressed their mangers a nd went over the priorities for the coming week. The company also sent emails ev ery week informing the staff about the underperforming managers who were fired, thus instilling a sense of fear of non-performance. 3. In what ways has Mr. Nardelli attempted to change the following elements of t he Home Depots culture: enacted core values, behavioural norms, type of people, s ocialization activities, and reinforcement/maintenance activities? Before Nardelli took over as CEO of Home Depot, the organisation culture was ent repreneurial and encouraged autonomy. There was a culture of collaboration and k nowledge sharing. Employees didnt fear speaking their mind to the senior manageme nt. Once Nardelli took charge at Home Depot, he bought about a major change in the c ulture. Enacted core values: Under Nardelli, the autonomy was revoked and a centralised command control structure was put in place. Every manager had to follow a plan a nd target designed by the head office. This reflected in the way each decision made by the organisation. Behavioural norms: Under Nardellis leadership, each store employee and manger wa s forced to behave like they were soldiers in a military unit and had to attack each target like it was a do or die target. Each action was measured in terms of accuracy and efficiency in a very mechanical fashion. Bob portrayed himself as a General commanding his troops and he went out of his way to bring out a cultur e of relentless performance. This was in contrast to their earlier random manage ment style which was entrepreneurial in nature. Type of People: Home Depot tried its best to bring in people with a military ba ckground. These people were very comfortable with a centralised organisational s tructure. These people were goal oriented and they approached business challenge s with same military mind set they had to win and defeat the enemy. Home Depot l ooked for people who were looking to be judged by their performance targets week after week i.e. with a strong drive to excel. This was a major deviation from t heir earlier practise of retaining experienced people so that their knowledge of the customers needs could be harnessed effectively. Socialisation activities: All employees of Home depot wear orange aprons which are almost like their military uniform. The company honoured all its employees who went on active military duty by hangi ng a blue star banner representing each of them in their head quarters Reinforcement activities: All the employees were constantly disciplined and brai n washed into behaving as if they were a combat unit. There was a very strong sp irit of Semper Fi. 4. Based on the class sessions on Developing and Utilizing Power and Influence a nd on Leading Change, please provide an assessment of the pros and cons of Mr. N ardellis approach to leading change at the Home Depot. In your answer, please inc orporate the 7S model and discuss which Ss Mr. Nardelli has changed successfully, and which ones he is having trouble changing successfully (in that he is needin g to replace people, etc. to accomplish the changes). Nardellis approach to change management was successful to quite an extent. He was

able to increase sales by a CAGR of 12%, but there was no marked increase in th e customer service levels and the employee morale was quite low. As the CEO, he had a lot of power and influence to effect change in the organisa tion. The team he picked to implement his changes also came from a military back ground and believed 100% in his vision for change. Nardelli made sure he motivat ed his employees quite strongly by exerting pressure and a sense of fear. He mad e sure that everyone down the line heard his message for change with no room for doubt. He used the influence tactic to drive change by exerting a high degree of pressu re on the employees in terms of benchmarking them against targets/ goals. In my opinion, his approach for change was too harsh for an organisation which h ad been founded on the core principles of collaboration and autonomy. The situa tion when he joined c CEO was dire, but the changes could have been made without antagonising the old and experienced employees. Loss of these experienced emplo yees further deteriorated the standards of customer service. In the retail segme nt, the customers expect the store employees to be able to offer advice based on their experience. In terms of the 7S model, Nardelli was successful in making changes to the hard Ss Strategy, Structure & Systems. He changed the strategy of Home Depot from depending only on the do it yourself market segment to catering to the professional services market segment as well. This approach gave them a strong advantage over their competitors who were not present in this market segment. He made changes to the decentralised structure of the organisation and converted it to a centralised structure. He was able to put together effective performance measurement systems in place t o track the achievements of targets. He also introduced new IT systems and centr alized purchasing to drive higher efficiencies. These systems were in tune with the organisation structure. Out of the 4 soft Ss, he was able to make a change in the Staffing. He made sure that a large percentage of the managers inducted were ex-military and hence they were most suited to working in his centralised organisation structure. All his key management team was also from a similar background. In my opinion, he is facing problems in changing the Style, Shared Values & Skil ls in his entire change exercise. The employees and especially the senior managers have been used to a culture of autonomy and taking that autonomy away and replacing with a centralised command control structure has not gone down well with staff Even the steps taken by him of firing managers who dont meet their targets has on ly proved counter effective. His decision to replace full time experienced emplo yees with part time employees has led to discontent His exorbitant pay check was another reason to antagonise employees. All his attempts to change these aspects of the company have not succeeded.