CASE 10
Home Depot Implements Stakeholder
Orientation
CASE NOTES FOR INSTRUCTORS
The objective of this case is to familiarize students with the concept of stakeholder orientation. Home
Depot is a large retail chain and therefore must consider a number of different stakeholder groups in its
decision-making processes. Students should realize, however, that Home Depot was not always so
stakeholder oriented. In fact, Home Depot has had to work hard in recent years to develop a positive
reputation. For instance, under former CEO Robert Nardelli, employees were terrified of being fired if
they did not follow his directions to a tee. The corporate culture was such that employee needs were not
being considered. Having a stakeholder orientation means constantly adapting to changing
circumstances. To this day, Home Depot continues to learn new ways to remain competitive and meet
stakeholder needs. Having a stakeholder perspective is a crucial advantage for Home Depot as it faces
competition from rivals such as Lowe’s.
In order to improve its image, Home Depot engages in strategic philanthropy. The retailer offers
educational days for children and has provided housing for victims of natural disasters. It also works
with the Forest Stewardship Council to ensure that its lumber is sourced from sustainable supplies.
Instructors may want to ask students what they think of Home Depot’s ethics and environmental
initiatives. Does it make them think more highly of Home Depot as a company, or do they think that it
is a waste of corporate money?
In addition to seeking to satisfy customers, Home Depot has taken strides to be a better place to work as
well. As part of the settlement of a gender-discrimination lawsuit, Home Depot established internal
mechanisms to allow employees to formally inform managers of their advancement interests. Home
Case 10: Home Depot Implements Stakeholder Orientation 105
QUESTIONS AND DISCUSSION
1. On the basis of Home Depot‘s response to environmental issues, describe the attributes of this
stakeholder. Assess the company‘s strategy and performance with environmental and employee
stakeholders.
Students likely will provide a variety of answers, depending on their points of view. They should be
able to provide reasons for their thinking for both parts of this question. Students should be able to
concerns is the most urgent issue for Home Depot, particularly when the company is striving to
compete against Lowe’s and other retailers.
The second part of the question asks student to assess the company’s strategy and performance with
employee stakeholders. After former CEO Nardelli left the company, Home Depot strived to
improve its relationships with its employees. Home Depot also seeks to apply social responsibility
2. As a publicly traded corporation, how can Home Depot justify budgeting so much money for
philanthropy? What areas other than the environment, disaster relief, and affordable housing
might be appropriate for strategic philanthropy by Home Depot?
Instructors may want to ask students to review Home Depot’s financial statements before
answering this question. Undoubtedly, strategic philanthropy helps major corporations improve
their reputations and build goodwill among stakeholder groups. However, the question remains:
What is the right amount of money to donate to charitable causes? Instructors may want students to
106 Case 10: Home Depot Implements Stakeholder Orientation
3. How is Home Depot working toward reducing its weaknesses to increase its stakeholder
orientation?
Students’ answers may vary and should be supported by reasoning. Under CEO Frank Blake,
unsatisfied customers were addressed through various media such as Twitter and personal phone
calls. This direct response to customer criticisms mostly resulted in positive outcomes because it
showed customers that they were being heard and their concerns were taken seriously. This helped
to improve Home Depot’s relations with its customer stakeholders. The introduction of self–
checkout lanes and equipping employees with handheld scanners also improved customer relations
because they were not required to wait in line for long periods of time. Allowing customers to make
their purchases with PayPal also created a convenience that most other retailers do not offer. The
First Phone device transformed the customer service experience inside the store. Finally, hosting
workshops for kids, women, and new home owners also serves to emphasize the company’s
stakeholder orientation by teaching new skills.
Case 10: Home Depot Implements Stakeholder Orientation 107
Resource Institute, whose mission is to help small minority- and women-owned businesses by
providing them with resources and training.
ADDITIONAL RESOURCES
*Note: The truthfulness of these items cannot be verified. Thus, instructors should use caution in giving
them exceptional credence.