1. Define and discuss the three levels of organizational culture. In your view, what changes can be brought into the various levels of organizational culture at Home Depot?
2. Based on your review of the external environment of Home Depot, provide three recommendations to improve the company's culture in reference to customers.
Making a New Culture
Home Depot stores used to be known for customer service. A host of friendly employees would help customers navigate a huge inventory, find exactly what they needed, and even provide detailed instruction. Those days seem long gone, though. Under the leadership of the former CEO, the company shifted its focus away from customer service to reducing inventory and cutting costs. Stores that once had an employee in nearly every aisle are now being manned by just a handful of employees, even during the busiest times. Customers who were used to getting helpful, personal attention can no longer find even a cashier, much less someone that can answer their questions on how to use a reciprocating saw.
Marvin Ellison, promoted to CEO in 2008, saw the disastrous results of Home Depot's lack of attention to customers. In the last three months of 2009, the company lost $54 million. To make matters worse, the company's reputation took tremendous hits. For many years, it routinely ranked near the bottom of the University of Michigan's American Customer Satisfaction Index, which compiles consumer evaluations of all major retailers. Even after Home Depot recovered in these rankings slightly, it still lagged far behind competitors like Lowe's and Ace Hardware. He had to listen to countless stories of how consumers would drive an extra 30 minutes, even an hour, to avoid going to Home Depot.
To turn things around, Marvin Ellison has committed to a new company vision-a culture that is dedicated to meeting three goals-clean warehouses, stocked shelves, and top customer service. He wants employees to set aside a portion of their shift to do nothing else but take care of customers. He wants to revise evaluations so that employee performance is reviewed primarily on the basis of customer service. He wants to give financial incentives to employees who provide great service. He wants to reduce the number of messages that stores and employees get from headquarters so that they can focus on customers. In short, he wants to restore Home Depot's reputation for providing the very best in customer service.