Home Depot’s Military-Style Structure

474 Words2 Pages
Home Depot’s Military-Style Structure Home Depot hired former GE executive Robert Nardelli as CEO to replace its two founders; Bernie Marcus and Arthur Blank. Nardelli realized that the company’s organizational structure needed to change. With his military background he had developed a reputation for lowering costs and overhead as well a centralized chain of command. (Griffith) One of his first cost cutting moves was to centralize the company’s purchasing activities to the headquarters in Atlanta, Georgia. This reduced costs by streamlining procurement undertakings from several other locations around the country. Secondly, Nardelli created a sophisticated organization wide IT system which tracked how each store was performing. This permitted managers to see how well their store was succeeding compared to others. This data is also seen by top management of the company. In addition, he brought on board another GE exec, Dennis Donovan as executive vice president of human resources. Together they rolled out the daunting task of putting HR managers in each of Home Depot’s 1300 locations. (Griffith) These moves have changed the tasks and responsibilities of store managers extensively. First with centralizing purchasing, it took away the authority of store managers to choose which products to sell in their stores. Doing this allowed Home Depot to attract new customers because of the new, innovative products they now stocked. (Constantineau) With the addition of HR managers in each store, proper training and the evaluation process became a focal point. Pre-Nardelli, there were 157 employee performance evaluation forms in use. He cut that down to two, one for management and one for regular employees. Distinguishing itself from competitors is a constant battle, and the macroeconomic environment may shift against the corporation. If the housing sector keeps doing well,

More about Home Depot’s Military-Style Structure

Open Document