Home Depot Case Study
They initially began using recycled materials for many of their supplies, but have since expanded their recycling initiatives to packaging, compact fluorescent light bulbs, and even opened the first drive-thru recycling center in Georgia (Ferrell, Fraedrich & Ferrell, 2009). In addition to these recycling programs, they also teamed up with organizations dedicated to forest conservation and began offering wood products certified by these organizations and eventually announced that they would “stop selling products made from wood harvested in environmentally sensitive areas” (Ferrell et al. , 2009).
To further promote their environmental activism, they have made numerous charitable donations, instituted a carpooling a program and created The Home Depot foundation to support non-profit housing initiatives. While the environmental activists could comprise many of the stakeholders, the primary stakeholder they represent is the customers. While many of Home Depot’s customers may not be as environmentally conscious, their numbers are growing and they can have a profound effect on business. The power of these stakeholders is evident in how the company has reacted to the protests by ceasing to sell wood harvested from sensitive areas.
The stakeholders’ concern for the future of the planet is certainly legitimate, especially for a company such as Home Depot that makes its business selling such a large amount of wood products. As far as urgency is concerned, many will state that there is no more urgent matter than the health of our planet and protecting the future for generations to come. 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, affordable housing, and at-risk youth might be appropriate for strategic philanthropy by Home Depot?
Home Depot can budget such a large amount of money toward philanthropy for the same reason they can spend so much on advertising. While many customers may be urged to visit Home Depot due to the latest commercial, circular or sale, many customers are becoming more socially aware and prefer to spend their money at businesses that share their beliefs. “”Doing well by doing good” has become a familiar motto in the business community, which acknowledges that the motivation to “do good” is at least partly self-serving” ([email protected], 2007, para 6). Another area that Home Depot could make a big difference is in education.
While they have done a lot of work with low-income families, more can be done within traditional public schools. Aside from just building playgrounds, Home Depot could expand their in-store clinics and make them mobile, sending them to the different schools in the area. They could teach the children to plant a garden, build projects and perform common household repairs. Not only would this benefit the communities, it would also create customers for life. 3. Is Home Depot’s recessionary strategy of eliminating debt and halting growth a wise one? What would you recommend to the CEO? Home Depot has made many changes due to the recession.
They have slowed down their expansion, closed the EXPO stores, cut spending and suspended their stock buy-back program (Ferrell et al. , 2009). While only time will tell if this was the best move, as the number one home improvement store in the country, it is a wise move. By focusing their efforts on improving their current stores, they will make the customers experience better and encourage them to return. Once the recession is over, these customers will be more likely to come back and spend their money. The one recommendation I would make to the CEO is not to cut back on employee incentives.
If their main goal is to improve their stores, they need to start with the employees. Keeping their employees happy during this time is crucial as happy employees work harder than unhappy employees and are less likely to seek new employment when the economy turns around.