Environment
The environment of an organization like that of Home Depot is especially crucial to the success or failure of the business. The founders of Home Depot, Bernie Marcus and Arthur Blank, both came from the home improvement store Handy Dan. Because of their close personal and business relations, they were able to establish an environment that quickly propelled the company to a bright future. Bernie Marcus believed in a ‘nonelitist’ management style and really emphasized his employees. This created an environment where employees felt a unique combination of both trust and responsibility.
Then, in 2000, without really any explanation at all, Ken Langone offered the CEO position to Bob Nardelli. Unfortunately, with this change in CEO came a change in the environment. Nardelli started to cut employees salaries, which undoubtedly frustrated many of them, while also hiring more part time employees. Once Nardelli quit about seven years later, the numbers proved that Home Depot hadn’t done any better, which is a direct consequence of the environment.
Then, in 2000, without really any explanation at all, Ken Langone offered the CEO position to Bob Nardelli. Unfortunately, with this change in CEO came a change in the environment. Nardelli started to cut employees salaries, which undoubtedly frustrated many of them, while also hiring more part time employees. Once Nardelli quit about seven years later, the numbers proved that Home Depot hadn’t done any better, which is a direct consequence of the environment.
Ego
Ego is one area where Bob Nardelli failed. When he came in as CEO, he did not focus on the right problems. Instead, he focused on what he wanted to do, which was cut costs. What he should have focused on was customer satisfaction, which was ranked last among major retail stores. Additionally, in 2006, Nardelli was infamous for limiting the amount of time that each shareholder talked at the stockholders’ meeting. This is unacceptable when leading a business that is the size of Home Depot. One last point that is worth noting about ego is the fact that Nardelli resigned because he wasn’t being paid the amount that he thought he deserved. This is directly contrasted with the ‘nonelitist’ style that both Marcus and Blank employed when the company was first starting out.