Change of Organizational Culture Case - Essay Example

 Change in Organizational Culture The article is one of the best examples of organizational cultural change in business history. The analysis itself is a crucial piece of knowledge about how organizational culture can affect an organization in so many aspects. Although humans have a tendency to resist change; it is yet the only process that is the most persistent. The reason for this is the fact that working conditions do not remain the same for extended periods of time; change therefore becomes inevitable for the survival of organizations with the passage of time. Before the steps which were taken by the team, there was a primary decision, made by the new CEO of Home Depot Robert Nardelli, which was the major factor enabling the change process. The decision was the hiring of Head of Human Resource Dennis Donovan. The said decision was important because; of course Nardelli was the one introducing the cultural change, but it is always the HR Department which carries it out as the front line soldier. HR is the driver behind the change wheel. Nardelli was a visionary CEO for Home Depot. He not only indicated the current issues faced by the company but also indicated the future problems as well that might be faced by the company. Not just that he also gave solutions for that by starting with his idealistic three-part strategy. 1. Analyze the steps that the team took to make the change. The first step taken by the team in cultural change was the introduction of cultural change toolbox. These were all standard tools including detailed forms for organizational quarterly performance evaluations. There were many other tools including resource planning, talent reviews, learning forums, conference calls and HR processes. The introduction of matrices, processes, programs and structures which were part of Home Depot cultural change were the main elements which added as a fuel in the company’s cultural change. These matrices quantified data on both sides of the equations i.e. the customer side and the employee side. On the customer side it was quantified in the form of feedback and customer perception about the stores and likewise on the employee side an HR process was introduced. Donovan introduced a new performance management system lessening more than 150 employee forms to just three one page electronic documents. The new performance management was quantitative in nature rather than qualitative as it was before. It enabled the HR department and the managers to identify people with right skill set for the right job (Charan, 2006). Other matrices like revenue, margins, inventory, cash flow relationship matrices and matrices for collaboration and decision making for managers were also presented which purposely simplified processes like merchandising, operations and the whole supply chain process. In the Processes part the two-hour Monday morning conference call by executives with individual reports on their responsibilities created a culture of cooperation and accountability among the executives, enabling them to make sound decisions. The information about upcoming product and promotions were broadcasted on each Monday afternoon in every Home Depot store which was named “The same page”. There was another interesting process known as SOAR (Strategic Operating and Resource Planning) where senior leadership decided about investments, short-term and long-term targets. Along with SOAR, Human Resource functions were also improved to a great extent. In Programs part there were a handful of activities introduced to create a common vision and culture in every senior employee’s mind. Few of them were “Five day learning forums”, “Future Leadership Program”, “Store Leadership Program” and “Merchandising Leadership Program”. Lastly in structures the major step was to centralize the purchasing process which in the past was done individually by all nine divisions. It decreased the individual costs while boosting gross profits. The idea was to have one centralized purchase department to standardize the products and prices. 2. Explain what the whole change was about and why it is considered so successful. The whole change was about making the organization centralized. There isn’t an argue if the change was good or bad but the thing is it was successful. It was successful because of the military nature of Robert Nardelli. The change had its consequences, as the change model which was applied on Home Depot was totally of a different industry. People who were against that change had to quit at certain point and the people who were left accepted the change so there was a bit less retaliation. Another factor which made it successful was that Nardelli was a leader, with his leadership qualities he knew how to bring change but that change brought its own concerns. The company bears a lot of financial loss in his tenure mostly in the financial markets. Share prices went down and same goes for the sales. The most positive aspect of this change was that employees started interacting with each other on every level. The interaction, cooperation and mutual decision making, improved business results and combined nine Home Depot divisions into a one fine organization (Czander,, 2012). 3. Select two tools that the company used and that you consider most important and explain your choice. An Array of Leadership Development Programs One of the most important things in the cultural change is train people for current change and to keep this new culture alive in the future as well so that it does not die along with the people who brought it. The programs introduced by Donovan, like training forums or leadership programs enabled the new culture to descend in the roots of the organization. When the new culture gets practiced by the people it stays in the people. Mapping of the HR Process0 HR plays a crucial part in the organizational cultural change. The initiative to improve HR in 300 different ways proved that HR itself accepted the cultural change. For large organizations like Home Depot all HR functions should be comprehensive on every step. Upgrading this department was significantly important in a way that it is where human capital is acquired, which is the backbone of the organization. References Charan, R. (2006). Home Depot’s Blueprint for Culture Change. Harvard Business Review Czander, W. (2012). The Death of the American Corporation: The Psychology of Greed and Destructiveness among CEOs and Bankers.  William Czander. Read More