Controlling Control: How Bob Nardelli Essay

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The company needed greater agility in managing how it responded to customer demands, and also needed to have much greater control over inventory management as a process as well. In responding to these strategic weaknesses in the company, Mr. Nardelli invested $1B in new information systems and created entirely new information systems platforms for the more efficient sharing of sales data between stores and with regional and worldwide headquarters in Atlanta. As a result of this system, Home Depot was able to capitalize on the building boom of the 1990s that lasted into the 21st century, and soundly beat their financial estimates of performance as a result. These systems were also directly responsible for the company gaining market share over Lowes' and other do-it-yourself chains globally as well (Reingold, 2008). The use of it as a strategic advantage, combined with its reporting accuracy of key metrics, was used by Mr. Nordelli to continually drive accountability into the organization. The result was that the fast-moving products that were lower margin yet highly price competitive were more profitable than ever. The company's focus on higher-end services selling continued to gain in performance as the processes used in these higher-end businesses had been re-architected using Six Sigma techniques.

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Mr. Nardelli was however did not take into account customer-facing metrics as much as needed and was often criticized for a passionate focus only on performance over people (Reingold, 2008). He has since been defended for his passionate focus on results by his former boss, Jack Welch, who says Home Depot benefits from Mr. Nordelli's tough management style more than they realize (Welch, 2007).

Conclusion

The fact that Bob Nardelli took a laid-back, often unfocused do-it-yourself home retail chain and created one of the most profitable chains globally is a testament to how powerful accountability and measurement is as a control strategy in management. The reliance on continual improvement as defined by Six Sigma certainly accelerated his ability to transform and grow the company over time......

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