When Bernie Marcus and Arthur Blank opened the first Home Depot store in Atlanta in 1979, they forever changed the hardware and home-improvement retailing industry. Marcus and Blank envisioned huge warehouse-style stores stocked with an extensive selection of products offered at the lowest prices. Home Depot has a history of powerful leaders who helped the company become a mega-corporation. Home Depot is now the largest home-improvement retailer in the world, with over \(\$ 78\) billion in revenues. Because of Home Depot's leadership, the company continues the tradition of doing things on a grand scale.

Marcus and Blank were successful leaders who built a strong culture at Home Depot based on the concept of the inverted pyramid: placing customers and store associates at the top and executives at the bottom. Home Depot's store-centric culture put emphasis on the satisfaction of the customer and the associate, which led to Home Depot's many successful years in business. However, the company encountered a period of challenges when the founders decided to bring on a new leader who would grow Home Depot's infrastructure and technology. After this decision, Blank stepped down as CEO and joined Marcus as co-chairman of Home Depot. Blank was replaced by Robert Nardelli, a high-level executive at General Electric (GE). The store-centric culture of Home Depot was very different from the performance-focused culture of GE. This cultural divide became an issue when Nardelli tried to run Home Depot in a way similar to how he ran his branch of GE. Rather than follow the inverted pyramid established by founders Blank and Marcus, Nardelli took a top-down approach to running Home Depot: executives at the top and customers and store associates at the bottom.

During the Nardelli years, many resources were invested into implementing new technology to streamline Home Depot's operations. However, with the technol-ogy improvements in the storefront came staffing cuts. These staffing cuts demonstrated to stakeholders that the inverted pyramid was no longer a focus of Home Depot. Nardelli was also critical of associates and store managers, leading employees to fear for their jobs if they did not follow his directions perfectly. Because of Nardelli's strict management style, he replaced store managers with former military officers, a tactic he learned during his time at GE. With these changes, Home Depot went from a relatively laid-back work environment to a militant work environment. Staffing cuts also led to consistent customer complaints regarding customer service. Home Depot was ranked last among major U.S. retailers in the University of Michigan's annual American Consumer Satisfaction Index. Former managers at Home Depot blamed the company's service issues on a culture that operated under principles reminiscent of the military.....

Question

1. What type of organizational controls did Nardelli use as a manager? What about Frank Blake?
2. Why do you think there was so much resistance to control when Nardelli became CEO of Home Depot? Use Table 15.3 to describe some of these reasons.
3. What are some methods Frank Blake used to restore morale and overcome resistance to control?