Business: Leadership and Home Depot - Management Essay Example

“The ability to lead has been observed and reported on for many centuries - Business: Leadership and Home Depot introduction. Many ancient writings tell tales of leaders who served in battle, commanded nations, or taught religious ideas. In a general sense, the primary qualities associated with leadership are vision, enthusiasm, trust, courage, passion, coaching, developing others, intensity, love, and even serving as a parent figure. In an organizational context, leadership involves influencing the behaviors of individuals and groups to work toward predetermined goals (Baak, 2012).” With leadership comes my different forms of leadership, know as leadership styles. Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. There are three main types of leadership styles that are well known in business, from an organizational point of view that include authoritarian leadership (autocratic), participative leadership (democratic), and delegative (laissez-fair) leadership. “Many agree that participative or democratic leadership yields the best results, as it provides a median between the extreme authority of the authoritarian leader and the lack of direction in laissez-faire leadership. Nonetheless, each leadership style can prove effective when applied in the appropriate context. The role of an effective leader is to adopt the style that fits best with his team dynamics (Cutajar, 2012).” But many leaders tend to use and abuse these leadership styles to their best advantage, with any regard for others, former CEO of Home Depot Robert Nardelli is a great example. Robert Nardelli was heavily criticized for his leadership style and methods he used during his tenure as CEO of Home Depot. The purpose of the paper below is describe his style of leadership and take a position on whether I feel his actions rose to the level of being unethical. The paper will describe Nardelli’s leadership style in terms of leadership theory, that include trait theory, behavioral theory, situational and contingency theory, and whether his actions were ethical or unethical. Leadership styles and theories, vary from one to another, therefore learning how to use a little piece of each and every of them (ethically), can be a greatly improve you overall leadership skills and capabilities.

“After losing the competition to become CEO of General Electric (GE), in 2000 Robert Nardelli, while having not retail experience, was recruited by Home Depot, the world’s largest home-improvement retailer, as CEO and later chairman - robert nardelli leadership style. He overhauled the company’s decentralized management structure and replaced its freewheeling, entrepreneurial culture and its exuberant—some would say rowdy—atmosphere with “Six Sigma” managerial procedures. Utilizing GE’s classic business strategies, Nardelli in stalled processes and systems, streamlined operations, moved into new markets, and grew Home Depot through acquisitions (www.referenceforbusiness.com).”

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Robert Nardelli’s leadership style was more authoritarian (autocratic), than that of participative or laissez-fair leadership because, when Nardelli’s arrived at Home Depot, he immediately incorporated his blunt and straightforward business style approach that he used with his former company GE, and tried to centralized Home Depot without any consideration of employees and executives and Home Depot‘s culture; a sort of do this my way or else approach. This approach was very unethical because, DEL solutions state that “almost immediately, he embarked on an aggressive plan to centralize control of the nation’s second-largest retailer…self checkout aisles and inventory management systems that generated reams of data. Nardelli is retreating to his comfort zone; he is molding a new GE. He is tearing at he heart of managerial freedom and focusing on bottom line performance over customer, employee, and vendor objections. Retail, the heart and soul of the company’s expertise had taken a heavy toll in this process. In his first six weeks at the company, Nardelli eliminated 39 managers replacing 24 of them (61%) with managers void of retail experience (many of them former GE personnel) (www.delsolutions.org).” “He replaced the decentralized store structure with a command center approach and substituted existing evaluation methods with those of GE’s; rating individual worth on an impersonal system of performance metrics. His inability to reconcile the importance of Marcus and Blank’s culture, alienated most of management and had a devastating impact on employee morale. His effort to build up earnings, despite falling revenue, led to a number of policies and practices that increased employee workloads; eliminated the predictability of work schedules; emphasized temporary labor in favor of reduced benefit load; and, caused the departure of much of the company’s floor expertise when, in frustration, Home Depot’s huge compliment of former plumbers, electricians and contractors left for Lowes and elsewhere (www.delsolutions.org).” This unethical way of leadership eventually led to his downfall at Home Depot.

Trait theory, which is “similar in some ways to the “Great Man” theory, assume that people inherit certain qualities and traits that make them better suited to leadership (Cherry, 2012).” Nardelli’s straight forward personality and behavioral characteristics, may have been in inherited by that of his father and mother. “His parents, who had grown up during the Depression, instilled in him a strong work ethic. His father had started at GE as an hourly worker and rose to plant manager www.rferenceforbusiness.com).” Which may explain why Robert Nardelli’s overall approach to running Home Depot, was based on his strong family background of hard work ethic, no shortcuts and no non-sense tolerance, but eventually many saw his approach as rude and unethical in every sense of the word.

“The behavioral theories of leadership stress the importance of leader actions and activities rather than traits and characteristics, which implies that great leaders are not necessarily born that way; rather, employees can be taught and trained to become effective leaders (Baak, 2012).” In Robert Nardelli’s case, before he leadership role of CEO at Home Depot, his leadership style was built through his hard work ethic. “Robert Nardelli joined Chrysler in August 2007 as chairman and CEO and as a member of the board of directors. Before joining Chrysler, Nardelli served as chairman, president and CEO of The Home Depot Inc. beginning in 2000. Nardelli began his career at General Electric Co. in 1971 and advanced through a series of leadership positions in the company’s appliances, lighting and transportation systems business units. In 1988, he left GE to join Case Corp. in Racine, Wis., where he led Case construction equipment’s global business. He returned to GE in 1992 and was ultimately named president and CEO of GE power systems and senior vice president of GE (www.topics.wsj.com).” Throughout this tremendous career building journey, Nardelli had no choice but to become the strict, no frills autorcatic type of leader, when he finally arrived at Home Depot. But this great career path still gave him no grounds to treat his employees and executives as his pets, test their intellect, and treat them as if they were is personal robots, in such the unethical manner that he did.

“The situational leadership model proposed by Hersey and Blanchard reflects how a leader should adjust his or her leadership style according to the readiness of the followers. The model suggests that leaders should be flexible in choosing a leadership behavior style and become sensitive to the readiness of the follower (Baak, 2012).” Robert Nardelli completely ignored this type of leadership model, because when he arrived at Home Depot he immediately ignored and failed to try and understand the culture of home depot, the type of customers and employees that they had, and the overall capabilities of the employees. This unethical state of mind led to many of the employees leaving to find work at a competing franchise by the name of Lowe’s. Customers also found out how the employees were being treated and fired at Home Depot, and they too decide to buy from a different franchise. Nardelli had no respect for any of the employees, executives or managers skills and labor. “Only weeks into his new job, Nardelli has already eliminated a layer of managers, realigned divisions and reassigned top executives. He was even planning to scale back the number of store openings in the coming year” (Sellers, 2001).”

“Fred E. Fiedler’s (1967) contingency model suggested that leadership success depends on a match between the leadership style and the demands of the situation. Rather than train leaders to adapt a new style, Fiedler believed that leaders should match their styles with situations that are the best fit (Baak, 2012.)” Nardelli, somewhat adopted Fiedler’s contingency model, by trying to incorporate his former company, GE, organizational structure into Home Depot’s organizational structure. But he did it in an unethical manner, because had no sympathy for the employees and managers that he fired and ran away from the company. “He created a management institute modeled on GE’s and hired former military officers to run his new “retail oriented” GE centered company. (Alic, 2004).” This type of unethical decision making, and his lack of context about Home Depot, he was no longer able to continue his work for Home Depot.

In conclusion, Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. But many leaders tend to use and abuse these leadership styles to their best advantage, without any regard for others, former CEO of Home Depot Robert Nardelli is a great example. After losing the competition to become CEO of General Electric (GE), in 2000 Robert Nardelli, while having not retail experience, was recruited by Home Depot, the world’s largest home-improvement retailer, as CEO and later chairman. Robert Nardelli’s leadership style was more authoritarian (autocratic), than that of participative or laissez-fair leadership because, when Nardelli’s arrived at Home Depot, he immediately incorporated his blunt and straightforward business style approach that he used with his former company GE, and tried to centralized Home Depot without any consideration of employees and executives and Home Depot‘s culture; a sort of do this my way or else approach. Trait theory, which is “similar in some ways to the “Great Man” theory, assume that people inherit certain qualities and traits that make them better suited to leadership (Cherry, 2012).” “The behavioral theories of leadership stress the importance of leader actions and activities rather than traits and characteristics, which implies that great leaders are not necessarily born that way; rather, employees can be taught and trained to become effective leaders (Baak, 2012).”

The situational leadership model proposed by Hersey and Blanchard reflects how a leader should adjust his or her leadership style according to the readiness of the followers. The model suggests that leaders should be flexible in choosing a leadership behavior style and become sensitive to the readiness of the follower (Baak, 2012).” “Fred E. Fiedler’s (1967) contingency model suggested that leadership success depends on a match between the leadership style and the demands of the situation. Rather than train leaders to adapt a new style, Fiedler believed that leaders should match their styles with situations that are the best fit (Baak, 2012.)” All in all, Robert Nardelli was heavily criticized for his leadership style and methods he used during his tenure as CEO of Home Depot. The purpose of the paper above was describe his style of leadership and take a position on whether I felt his actions rose to the level of being unethical. The paper has described Nardelli’s leadership style in terms of leadership theory, that include trait theory, behavioral theory, situational and contingency theory, and whether his actions were ethical or unethical. Leadership styles and theories, vary from one to another, therefore learning how to use a little piece of each and every of them (ethically), can be a greatly improve you overall leadership skills and capabilities. References

Alic, M. (2004, January). Robert L. Nardelli 1948-. Retrieved November, 26 2012, from

referenceforbusiness.com:
http://www.referenceforbusiness.com/biography/m-r/nardellirobert-l-1948.html Baack, D. (2012). Organizational behavior. San Diego, CA: Bridgepoint Education, Inc.

Cherry, K. (2012). Leadership theories: 8 major leadership theories. Retrieved November, 26

2012, from http://psychology.about.com/od/leadership/p/leadtheories.htm

Cutajar, M. (2012). Pros and cons of team leadership style. Retrieved November, 26 2012, from
http://www.ehow.com/info_8117744_pros-cons-team-leadership-styles.html The Wall Street Journal. (2012). Robert Nadelli bio. Retrieved November, 26 from http://topics.wsj.com/person/n/robert-l-nardelli/549
http://www.referenceforbusiness.com/biography/M-R/Nardelli-Robert-L-1948.html http://www.delsolutions.org/uploads/A_Study_in_Leadership.pdf

Business Ethics

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