Home Depot: On the Road to Becoming Customer-Friendly Again?

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Case Details:

Case Code : BSTR324
Case Length : 20 Pages
Period : 2000-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : The Home Depot Inc.
Industry : Retail; Home improvement
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Home Depot was started in 1978, and it became a popular choice for home improvement and home builders within a short span of time. It came to be known for do-it-yourself projects and knowledgeable store employees, who provided solutions to all kinds of civil work related problems of the customers. The company witnessed tremendous growth in the 1980s and 1990s, primarily because of excellent customer service. The business grew rapidly and a lot of innovations were incorporated.

However, the operation was not organized and the company suffered from several operational inefficiencies which acted as impediments to further growth.

With the aim of bringing in a more centralized management and systematic approach to the business, the founders Marcus and Blank appointed Robert L. Nardelli (Nardelli) in the role of a new president, CEO, and a board member. Nardelli brought in a new culture to the organization, laying more stress on data and processes, rather than on people and services. As a result of his autocratic style of management, both employees and customers began to suffer. He brought in a 'culture of fear,' by applying strict number driven measures to calculate employee productivity. He even reduced manpower drastically. As a result, the morale of the employees took a beating and eventually, customer service suffered...

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