Upon the arrival of Nardelli, the coordination and the control of Home Depot Center could be defined by the market model. The market model can be characterized by a low formalization and high decentralization (Burton, DeSanctis and Obel, p. 163). Home Depot Center was a centralized organization at some point of its development, and in that regard, the shift to autonomy as they perceived that the paper work sent from the head quarters was a waste of time, which prevented local managers to focus on their primary target, i.e. the customer. Accordingly, the result of such autonomy “might have freed store managers to respond to local market conditions, [but] it paradoxically made the company as a whole less flexible.” (Charan, p. 63).
The low formalization of the organization can be witnessed through the lack of bureaucracy and at some cases the discipline, which can be seen through the example of sending back the documents to the headquarter market with B.S. stamp. The low centralization can be seen through the focus on the local buyer, which as a result of the lack of coordination with headquarters eliminated the benefit from economies of scale which the regional offices should have enjoyed.
After changing the culture in the organization, of the Home Depot Center can be seen taking the machine model. The machine model can be characterized by an emphasis on a high degree of formalization and a high degree of centralization (Burton, DeSanctis and Obel, p. 162). The high degree of formalization is reflected through the documentation of the rules and procedures. It can be seen that Nardelli avoided from the start the concentration of authority on him, and thus a standard, companywide performance management process was introduced (Charan, p. 65). It can be assumed that the company’s first model was the family model, low decentralization and low formalization at the time of foundation, where the power, the authority, and the rules were concentrated within one person, presumably the founder or the CEO.
The family model turned into the market model, where different regional affiliation became autonomous from the headquarters. Thus, it can be said that the machine model returned is similar to the family model used at the time of foundation except that the formalization was high. At such, the CEO and the top management might change, but the high use of information and the adaptation by modifying rules, makes the company invulnerable to such changes in the future as the rules now formalized. Accordingly, the centralization of merchandising is needed in order to leverage the buying power of huge company, which Home Depot Center was. As previously being autonomous, the various affiliations were not utilizing the economy of scale of the company.
The situation: Home Depot Center has cultural characteristics which do not correspond to the economy of scale “the size of Home Depot should have enjoyed”(Charan).
The desired situation: Renovating the organization’s culture, so that employees do not lose their commitment to the customers and at the same time relying on data and coordinating their efforts.
Restraining Forces are the forces which hinder that work against the changes resisting the desired situation.
It can be seen that the change is viable in terms of its driving forces.
In terms of the tridimensional resistance, it can be said that all three changes were evident at some point or another through the process of change implementation. For example behavioral resistance was seen through the reaction of top executives who left during Nardelli’s first year. Additionally, behavioral resistance can be apparent through SOAR meetings, where people “were holding back until the annual SOAR meeting before seeking funding for good ideas.”(Charan, p. 70).
Cognitive resistance was evident through the reactions of the employees to whom the idea of the Marcus (then chairman) and Blank (then CEO) leaving was unacceptable. Although, none of the employees expressed what they felt like with the new changes , t can be said that the main resistance was driven by the attachment to the organization as it was, and as Nardelli himself stated, that he was “an outsider who would “GE-ize their company and culture.” (Charan, p. 63).
Tabrizi’s model can be seen as the most effective for the Home Depot’s center case study. Tabrizi’s model implies the existence of stages through which the transformational process will be implemented, and what is most important will be prepared for. In that regard, taking in consideration, the needs of the company and the way Nardelli might approach them, it is apparent that the main pre-transformation goals are applicable to the case of Home Depot center. These goals includes, but not limited to: 1) addressing the initial resistance, 2) getting support, and 3) setting the seeds (Tabrizi, p. 30).
These goals can be managed through the stages of the pre-transformational phase, where for example taking in consideration such aspect the assessment of a change need, it can be seen that for the case study it was an important issue, as there were no apparent change needs; “the company continues to enjoy robust and profitable growth.“(Charan, p. 60). Thus, it can be seen that merely analyzing the financial statement of the company cannot indicate the main driving forces for the transformation, so the pre-transformational phase was needed. Additionally, the pre-transformational phase will allow the business to continue as usual, which in the case of a company, which was put on “a stable footing”, continuing the business was a vital factor.
Going into the specifics of the transformation itself, the 90 model phases include the diagnosis phase, where the root cause of the problem will be identified; planning and development phase, where the teams “develop a detailed vision of where their respective function should be” (Tabrizi, p. 19); and the development of a detailed implementation plan, which involves the execution of the designed plan.
Looking at the case study, it should be noted that there some mutual component in Tabrizi’s model and Kotter’s 8 step model(Carpenter, p. 6) However, Tabrizi’s model implies going through all the steps, whereas it can be said the flexibility in Kotter’s model allows for the steps to be prioritized according to its urgency (Carpenter, p. 6). In that regard, one of the main efficiency factors in Tabrizi’s model is that is all-encompassing and integrative, i.e. all of the aspects of the company are addressed during all the transformation phases, rather than one step at a time.
For example, in the case study the main transformation force was the need for a cultural change, and at the same time there were other areas that should be addressed such as improving profitability, centralizing merchandizing and expanding the market. Tabrizi’s model implies addressing each of the areas simultaneously at each stage of the assessment, development and implementation. In that sense, such aspects as engaging the customers and controlling the financial capital can be seen as essential only based on the initial assessment, rather than a required step in Kotter’s model.
Works Cited
Burton, Richard M., Gerardine DeSanctis, and Børge Obel. Organizational Design : A Step-by-Step Approach. Cambridge, UK ; New York: Cambridge University Press, 2006.
Carpenter, Mason. Managing Effectively through Tough Times Prentice Hall, 2009.
Charan, Ram. “Home Depot’s Blueprint for Cultural Change.” Harvard Business Review 84.4 (2006): 60-70.
Tabrizi, Behnam N. Rapid Transformation : A 90-Day Plan for Fast and Effective Change. Boston: Harvard Business School Press, 2007.