BUS610 Wk4 Assignment
BUS610 Wk4 Assignment
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Date Created: 11/14/15
Running Head: TRAITS, BEHAVIORS, AND ETHICS 1 Traits, Behaviors, and Ethics – The Transformation of Orange Kerry Vault BUS610: Organizational Behavior Professor Yamil Guevara May 4, 2015 Ashford University TRAITS, BEHAVIORS, AND ETHICS: THE TRANSFORMATION 2 Introduction The former CEO of The Home Depot, Robert Nardelli, employed many unpopular but arguably successful tactics during his tenure as leader. Through the process of centralization of purchasing processes, diversification of services offered and additional customer base catered to, and an eventual shift in corporate culture, Robert Nardelli changed the way the company operated from the bottom up. Many theories can be applied to the leadership style used by Robert Nardelli, from certain trait theories describing which traits were important for successful leadership, to behavioral theories outlining how the leader approached and prioritized the important factors in a business. In addition, the leadership style employed can be dissected using situational and contingency theories – allotting certain styles of leadership to the exact function they serve, including specific nuances of the dynamic between leader and follower. No matter the theory used to describe actions taken by leaders, the question of ethical behavior can be answered through an analysis of the intentions of, and outcomes due to, the leader themselves. Traits When the board of directors for The Home Depot were looking to make a leadership change, it was obvious that they believed in the idea that certain traits were valuable to have in a potential leader. For instance, instead of promoting from within, which would have followed the smallcompany, grassroots type of feel that The Home Depot was known for, the board decided to hire someone with proven leadership success from a hugely successful corporation. In fact, the reason for hiring Robert Nardelli was more in line with the need for change to secure future growth and stability (Charan, 2006). The change that was required to take place demanded a TRAITS, BEHAVIORS, AND ETHICS: THE TRANSFORMATION 3 leader with certain traits, such as extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience (Baack, 2012). Of these traits, Robert Nardelli was probably best known for his openness to experience, conscientiousness, and extroversion – which allowed him to tackle the giant transformation that was necessary to change the culture and sustain growth for the company. First, Robert Nardelli hired an old colleague and wellestablished HR manager to spearhead the many changes he had in store – namely a change in the autonomous and free wheeling feel every store was accustomed to, including the combination of all of the regional stores to secure stronger buying power (Charan, 2006). To establish the buying power that The Home Depot should have had, the centralization of all 9 regional purchasing departments meant that the company as a whole would be able to purchase for less – thereby extending the value of the company. This move, although seemingly making common business sense, was a drastic change in the way the culture was accustomed to operating – thereby causing some executives to quit and other employees to question the direction of the company. What ultimately ended up making the change successful was Nardelli’s conscientiousness – in that he reached out to those employees that had the experience to make the correct decisions about process changes, and implemented those changes accordingly. This not only allowed for a successful and smoother transition of processes, it also allowed the employees to feel connected to those changes. Yet another trait that was pivotal in the successful changes made at The Home Depot was openness to experience. Since Nardelli was focused on how certain types of data could be collected and analyzed to help improve operational efficiency, it should have come as no surprise that one major move that was made was to increase the number of parttime employees in an TRAITS, BEHAVIORS, AND ETHICS: THE TRANSFORMATION 4 effort to reduce overall costs (Grow, Foust, Thornton, Farzad, McGregor, & Zegal, 2007). Not only did this anger fulltime employees, it also caught negative attention from the consumers – generating complaints about lack of professionalism and apparent lack of customer service. This backfire caused Nardelli to reinstate many fulltime jobs as well as institute training for employees to better serve customers (Charan, 2006). This willingness to try new strategies, even if they fail, is a testament to how open Nardelli was to try new things and think outside of the box – yet change based on the lack of success of his ideas. This also gave him greater appeal in the eyes of employees, making him seem more open to making changes based on more than just money. Behaviors Based on the apparent reason that many changes were made during Nardelli’s tenure, it is easy to see that he was a productionoriented, or jobcentered leader – focusing more on statistical changes in operational factors rather than on the happiness or growth of his employees. Many of the changes made early on, including restructuring of purchasing personnel as well as the decrease in fulltime employees, were made specifically for the purpose of increasing operational efficiency and spurring growth. This strictly numbersbased approach to changes within the company and culture of The Home Depot could be seen as the makings for a poor leader – which if it weren’t for the case that Nardelli displayed other leadership qualities – would be true. For example, the fact that he paid attention to how consumers and employees both reacted to the reduction in fulltime staffing suggests that he is displaying a certain level of consideration – anticipating and allowing for employees feelings and comfort level (Baack, 2012). In addition, the numbersbased leadership changes made to the structure of the company TRAITS, BEHAVIORS, AND ETHICS: THE TRANSFORMATION 5 were done more through the necessity to approach the growth of the company in a way that is different from prior attempts as well as geared toward longevity. Essentially, people were put into positions that made more sense for the company, which was decided by a group of high level managers in a group format. This type of restructuring is an example of how Nardelli presented the ability to initiate structure into the changes being made – adding to his overall ability to successfully lead. Many factors that were included in how Robert Nardelli chose to lead the employees and management of The Home Depot point to how he was able to change his approach based on the situation at hand. This type of flexibility points to how certain aspects of contingency theory are used to explain how a leader may decide to change his or her approach. For example, often times Nardelli would be found going on secret shopper missions, blending as one of the customers. According to Reingold (2005), this type of behavior was less about checking up on employees and more about seeing what the customer sees so he can make changes if necessary to improve the customer experience. This type of situation is an example of how the leadership style may change based on the specific situation that is presented. For example, Nardelli may advise all stores to carry only orange pencils to match the company branding, although may change his mind about certain stores after learning that customers in the northeast are repulsed by orange. This style of situational based changes can be confusing to the company as a whole, which is why it is important for some aspects of the company to be decentralized. Ethics TRAITS, BEHAVIORS, AND ETHICS: THE TRANSFORMATION 6 Ethically speaking, it is not immediately apparent that Nardelli was unethical in the way he lead the company. In fact, it seems that through his tenure he made every decision, and called on every expert within the company, to ensure growth and stability for the company. However, one instance in the way that Nardelli lead, or perhaps failed to lead, can be construed as unethical in nature. When the housing market crashed in 2006, the necessity for homeimprovement spending failed with it. This is something perhaps Nardelli, and his team, should have been able to forecast and stop it from crippling the business growth. In fact, according to Stark (1993), “...ethical management is a process of anticipating both the law and the market…” (p.39). This type of forward thinking is paramount to ensuring that the employees – who assumedly have no control over the direction of the company – are protected and able to remain employed. Conclusion Whether ethically charged or not, the decisions that Nardelli made during his tenure as CEO of The Home Depot were likely made to ensure continued growth and success for the company. While making changes to the corporate culture as well as changing the structure of the employee powerfunction, Nardelli instituted his prior knowledge in industry as well as his corporate vision of how the company needed to change to survive. Through the use of trait and behavior analysis, as well as a closer look at how each specific situation may warrant a variance in leadership style, one can begin to paint a picture of how effective Robert Nardelli was as a leader, and why he approached certain situations the way he did. TRAITS, BEHAVIORS, AND ETHICS: THE TRANSFORMATION 7 References Baack, D. (2012). Organizational behavior. San Diego, CA: Bridgepoint Education, Inc. Retrieved from https://content.ashford.edu/books/AUBUS610.12.2 Charan, R. (2006). Home Depot’s blueprint for culture change. Harvard Business Review. 84(4), 6070. Retrieved from EBSCOhost database. Grow, B., Foust, D., Thornton, E., Farzad, R., McGregor, J., & Zegal, S. (2007). Out at home depot. Business Week. Retrieved from http://www.businessweek.com/stories/200701 14/outathomedepot Reingold, J. (2005). Bob Nardelli is Watching. Fast Company, (101), 7683. Retrieved from http://eds.a.ebscohost.com.proxylibrary.ashford.edu/ Stark, A. (1993). What's the matter with business ethics?. Harvard Business Review, 71(3), 38 48. Retrieved from EBSCOhost database.
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