Home Depot Mission Statement
“The Home Depot is in the home improvement business and our goal is to provide the highest level of service, the broadest selection of products and the most competitive prices. We are a values-driven company.” The above sentence is the mission statement of The Home Depot. The mission statement itself reveals what kind of standard The Home Depot is looking for. The Home Depot Incorporation was established on 22nd June, 1978 by Bernie Marcus and Arthur Blank. Home Depot is the world’s biggest home improvement retailer with 2242 retail stores in the United States and other countries across the globe. According to the article in Reuters, The Home Depot Inc. stands on the fourth largest retailer in the United States and fifth in the world. Since
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1984, The Home Depot Inc. stocks are being traded at New York Stock Exchange under the trade symbol of “HD.” Although, The Home Depot Corporation is a very successful company, Home Depot holds some unique qualities which separate it from other business counterparts. It is their values, respect & loyalty towards their customer and the society which makes The Home Depot successful. Today, Home Depot is known as a pioneer in the development of home service improvement products. Their ethics have helped them climbed the ladder of success in recent years. This business is somehow related to the customers’ emotions and expectations. And their current standing in world market itself suggests that they have been on top of their servings. Currently, The Home Depot Inc. ranks in Top 50 for the America’s Most Reputable Companies list on Forbes 2009. The Home Depot Inc. has not only launched promotional campaigns and provided monetary funds for the needy people in society, but has also incorporated ways to save society from natural disasters. According to the Corporation of Natural & Community Service, The Home Depot Foundation has helped the regions impacted by Hurricane Katrina by offering them 11 million for the rebuilding process. They have even launched a few corporate programs which promote their high standards of corporate responsibilities and leadership amongst the people and their own employees. Examples of these corporate programs are “The Home Depot Trade Scholarship Program” and “The Home Depot Community Hockey Program.” Also, Home Depot now has improved by making commitments to carry environmental friendly certified "green" products, all of which make positive statements about the company.
Industry Analysis The renowned Home Depot Corporation is widely spread across North America, China, and other parts of the world with almost 2000 store locations. It is involved in the retail and service business providing consumers with all the help required to create a dream home. The inventory of each store is approximated at 40,000 with over 250,000 other products not present on site. These products can be ordered specially for the consumer from various store locations across the globe. The merchandise available at the different store locations varies due to the fact that each local region has different market needs and it is important that such needs are met for consumer satisfaction. These products range from different kinds of home building materials, improvement supplies, appliances, apparel, and lawn and garden products, amongst other products required to decorate and create your home. Despite making great strides in the retail business, it also offers services of various kinds to fulfill its mission in becoming a top corporation in the home improvement business.
Many customers are not qualified professionals to take on home renovation projects. Home Depot Home Services offers professional help to such customers to professionally complete their project. These include the installation of windows to water heaters, floors to roofs, kitchen cabinets to vinyl siding, and fencing to landscaping. While the Home Depot Home Services program can provide support to the unprofessional customers, it also extends its helping hand towards the professional customers with special services and support to enhance their success through the Serving the Pro Customer initiative. “These customers have access to loyalty programs, a pro bid room to handle large customer orders with volume discounts, direct ship programs, credit programs and other specialty sales initiatives”.(Home Depot …show more content…
website) Contrary to the fact that it is a business focused upon maximizing its revenue, it offers ample of free workshops to help its customers. This is a great marketing strategy to gain new customers, while satisfying the existing ones. At the same time, they are able to promote their various products. Some of these include the free How-To Clinics offered every weekend at every store location. It allows the customers to gain hands-on experience and learn the different techniques involved in home improvement. Furthermore, it also offers the Kids Workshops for free on the first Saturday of each month between 9:00 am to 12:00 pm at all of The Home Depot stores. It is designed for children ranging from the age of 5 to 12 and their parents to gain hands-on experience. These free initiatives are beneficial for both the customer as well as the corporation. Thus, it is evident that The Home Depot has become one of the largest corporations in the globe in the home improvement business. It has fulfilled its mission of providing the customers with all the help and support required to successfully create a dream home.
Financial and Stock Market Performance
Home Depot, a home improvement retailer, has been in business for three decades. The secret behind their success is their service to customers. However, lately, Home Depot is struggling to make profit due to poor economic conditions "Home depot quarterly sales are down 6.2% with a reported net income of $756 million which is down from $1.09 billion". As a result, their stock price decreased and upset their shareholders.
Recession has caused Home Depot to lose big amount of money. Therefore, the corporation is finding cost cutting strategies to recover the cost. These strategies include layoff of thousands of employees from several stores, cutting pilot programs, support positions and closing of 54 stores around the country. This will help them to save money on wages and other expenses from closing the stores.
Home Depot is confident about their sales in this year.
Home Depot is adding new inventory in high profited stores to double the profit. As a result, they are forecasting sales to be double as well. They have also added few jobs in high populated are to meet the demand. They are looking forwards to make profit in this new year.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility is a business plan and sometimes refers as corporate responsibility. This business model describes the social responsibility of corporations towards the society and environment. Corporate Social Responsibility concept has been used by many businesses as it encourages community growth and development. In addition, it allows a number of corporations to voluntarily reduce harmful activities in the society.
The Home Depot was founded in the year of 1978 by four individuals: Bernie Marcus, Arthur Blank,
Ron Brill, and Pat Farrah. The main purpose of these founders were to make money and keep shareholders happy. On the other hand, founders also believed in doing charitable work for the society. They wanted to give back to society by helping the deprived ones. Therefore, Home Depot decided to create a CSR policy in 1991. This CSR policy mainly focused on helping communities with housing, natural environment, helping youths and natural disaster
victims.
Affordable Housing
Maintenance of a house can be financial burden for many low-income families. Home Depot realized this issue and decided to invest their funding for low-income families. Thereafter, they created affordable housing program. This project allows Home Depot to build and repair houses for low-income families. Recently, Home Depot has donated more than $25 million for this project and contributed more than $150 million for housing program, to date.
Environment
In 1990, Home Depot created this program to protect our natural system. This program provides financial support to non-profit organization with their environment related issues. The non-profit organizations work includes forestry and ecology, green building design, clean-up and recycling, and lead poisoning prevention.
Youth at risk
This program focuses on providing children with a safe place to learn and acquire significant life skills. This program also teaches construction techniques and problem solving skills to young adults. Moreover, this program helps children to develop self-esteem and leadership qualities. In addition, this program allows young individuals to contribute in community service event.
Home Depot has also created YouthBuild program in USA. This program has been created to help youth who have earned their diploma from college. This program teaches youth to make affordable housing, schools, community centre, and other renovation projects with their construction skills. Currently, with the help of this program, more than 6000 individuals are receiving their diploma while working on numerous renovation developments.
Disaster preparedness and relief
Home Depot offers this program to teach customer on how to face emergencies. This program also provides financial funding to communities in disaster states. This program partners up with many relief organizations to support international countries.
Home Depot made their first contribution towards this program in 2001, when they donated $75,000 to low-income families to deal with energy crisis. Recently, the corporate donated $100,000 for Haiti earthquake.
The corporation, Home Depot has always believed in a great charitable work, as they are involved in a number of projects relates with youth, environment and natural disaster. In addition, Home Depot is the first corporation that came up with the idea of saving natural environment and helping youth to become better, in its sector. Their contribution in the society has changed many lives.
Enough for the society? The concept of corporate social responsibility surely plays a part in the Home Depot culture as they contribute towards their CSR projects. On the other side, Home Depot also support Milton Friedman’s concept of making money for shareholder and keep them happy. Home Depot keeps a nice balance between Friedman`s theory and their CSR projects. This balance is the reason behind their low contribution towards the society. Home Depot also does not like that their charitable projects covered by media, as they do not intend to gain anything out of it. Due to this reason, sometime they do not disclose their contribution amount in public.
In the latest edition of its Business Code of Conduct and Ethics, Frank Blake, Chairman and CEO of Home Depot, starts his address to stakeholders of the company by declaring:
The Home Depot has a strong commitment to ethics and integrity, and our core values define the means by which we do business. Doing the right thing each and every day for the benefit of our Associates, customers, vendors, suppliers and the communities we serve is critical to our ongoing success.
Blake’s statement indicates the high regard and importance Home Depot places on ethics. From reading its outline of the Code, it is evident that Home Depot is dedicated to ensuring that ethics is a large part of the company’s business platform. Using this Code as the foundation in which in conducts it’s day to day business, Home Depot relies on its employees to conduct themselves appropriately and adhere to this code of conduct. Despise its strong commitment and efforts to raise awareness on its stance on ethical behaviour, Home Depot has been accused of some less than appropriate practices that violate its Business Code of Conduct and ethics. One of the largest ethical scandals Home Depot has faced in recent times relates to the bribery accusations made against corporate purchasers for the company. In 2007, Home Depot terminated four employees for taking bribes from an Asian vendor. Clearly, these employees were not following Home Depot’s Code. More specifically these employees were not living the values of Home Depot, one of which is “Doing the right thing.” Following up on this issue, Home Depot released a statement on its continued commitment to maintaining ethical standards. It reads: “Maintaining our ethical standards is of utmost importance to The Home Depot and is something we enforce strongly.” With the termination of these employees, Home Depot shows its value for following the Business Code of Conduct and Ethics. Had these former employees read and understood the Code, their jobs could have been saved and this bad press for the company could have been prevented. In the Code, an excerpt from its policy on receiving gifts and entertainment states:
The Company has a zero tolerance policy for receiving gifts and entertainment when there is any chance that the purpose is to: improperly influence the recipient; violate the Company’s Policies; or violate the law. Gifts and entertainment apply to anything received as a result of an actual or potential business relationship.
Clearly the employees have violated the terms of the Code and Home Depot did the right thing when the company terminated the employees in question. While most will agree that the company was right to terminate the employees in the situation above, the company has also come under fire for accusations of wrongful dismissal.
Trevor Keezer, a former employee, is accusing the company of terminating him because of his religious affiliations. According to Keezer, he was dismissed for wearing an American flag button on his Home Depot apron that read “One nation under God, indivisible.” Under the labour and employment section of its Code, it states, “The Home Depot will not discriminate against any Associate or applicant with regard to race, color, gender, sexual orientation, age, religion, national origin, disability or any characteristic protected by applicable law.” However, this case is not as cut and dry as the last example as arguments could go both ways: Should the employee adhere to the company’s dress code or is the ability to express his religious views of higher importance? These difficult questions raise ethical concerns for the company and a conclusion cannot be made without upsetting some stakeholders involved in this situation. Including these issues with its employees, Home Depot also has been hit hard by accusations that it cheated its vendors. Senior executives have come out and accused the company of wrongdoing by trying to bolster revenue by incorrectly identifying products as being damaged and receiving monetary credit from their vendors. In a statement released by the company, Home Depot defends itself by proclaiming:
The Home Depot values its relationships with all of its suppliers. Our return-to-vendor practices are subject to contracts that vary vendor by vendor and we respect all such obligations. Our internal financial controls related to vendor policies and inventory accounting preclude[s] any potential for a material adverse impact on the company.
If these allegations prove to be true, Home Depot can be in violation of its Code. Under the section titled “Commitments to Our Vendors and Suppliers”, it states:
“We will be professional and fair in all of our dealings with our vendors and suppliers. We will select business partners whose values and business practices are compatible with our own high standards so that we can build lasting relationships that enable us all to grow and prosper in a competitive marketplace. Consultants, agents and representatives of The Home Depot must conduct their businesses in accordance with our policies as well as relevant laws and regulations.”
This issue also questions Home Depot’s business ethics but also provides amble opportunity for Home Depot to rectify and recover from damage this situation has done to its reputation. Although these ethical dilemmas and challenges the company has faced in recent years highlight some concerns, it is evident from the outcomes of these situations that the code is being following to some extend by management at Home Depot. The company is still being targeted and not being viewed favourably amongst business ethicists. One writer on business ethics critic, Robert Blatchford, asserts “Home Depot’s “code” dictates ALL employees/associates, managers and officers must abide by the “code” or face severe disciplinary actions up to and including termination.” He goes on to explicitly state, “Home Depot can’t be trusted - take your career, investment and purchases elsewhere.” Although the opinion of one person cannot speak for an entire population, Blatchford’s opinion is shared amongst many and is representative of a general consensus.
Like other high profile retailers in North America, Home Depot is bound to come across various ethical issues that it must address. Still, it’s Business Code of Conduct and Ethics is well documented and written, and should be used by other organizations as an epitome to model ethical standards. If it continues to follow the Code and act on its mistakes, Home Depot will have no problem in addressing ethical concerns in the future. As a company that is publically traded in major stock exchanges, Home Depot’s financial statements are constantly under the public eye and monitored by top auditors to ensure that strict standards are followed. By following these strict standards, the company remains a valuable investment for present and future shareholders. With these strict standards of operating, Home Depot hopes that shareholders and creditors will trust its current financial position as valid and without management bias. Even with these efforts to prevent wrongdoing and continue these relationships with its shareholders and creditors, Home Depot has had its share of recent troubles with its investors and credit providers. In one highly publicized case, Home Depot’s shareholders were angered over compensation of top executives. Former CEO Bob Nardelli was accused of taking excessive compensation even though the company’s stock was suffering. One organization that took a stand against this is the American Federation of State, County and Municipal Employees. According to the organization’s website, “AFSCME’s 1.6 million members provide the vital services that make America happen and advocate for prosperity and opportunity for all working families.” In a rally against Home Depot, this organization played a key role in displaying their displeasure. One demonstrator chanted, "Hey, Nardelli! Your stock price turned to jelly!" In its Business Code of Conduct and Ethics, Home Depot asserts, “We will conduct our business and ourselves in a way that enhances and preserves the reputation of the Company while providing our shareholders with a fair return on their investments.” Home Depot may be violating their Code as the company is providing excessive compensation, according to the shareholders of the company. This is one example of ruining relationships with shareholders and can be very detrimental for the future of the company. In another incident Home Depot’s executives came under fire for missing an important shareholder meeting. Nardelli, who was already accused of being paid as the company’s stock fell, also “reportedly cut off shareholders after one minute and refused to answer many questions, this was a public relations nightmare.” With his refusal to answer questions, Nardelli didn’t help the already suffering image of the company. The company has also been victim to harsh criticism of several non-governmental organizations. According to the Ethical Leadership Group, an organization that promotes ethical behaviour, the ethical code of a company plays a vital role. In a statement on its website, the organization states:
Codes of Conduct are the foundation of any organization's ethics and compliance initiatives yet they often sit on a shelf or in a drawer, or are tossed out without being read. There are a number of reasons for this. One reason is that some employees don't believe their leaders practice what they say in the Code. A well-written Code won't help in this situation. Another reason is that the Code is poorly written - focused only on legal compliance; appearing to be designed to protect the company only; and not relevant to employees' day-to-day work.
This statement reaffirms the fact that an organization needs to create and enforce a code of ethics that must be following by top executives and front like employees alike. In addition to its general code of ethics, Home Depot has developed another financial-specific code. The purpose of this code states:
It is The Home Depot's intention to provide all stakeholders with the highest degree of confidence that its financial control systems are implemented and maintained by Senior Financial Officers who exhibit the highest degree of integrity and are free from actual or apparent conflicts of interest. Therefore, The Home Depot has adopted a specific Code of Ethics for Senior Financial Officers ("Financial Code of Ethics"), which is in addition to this Business Code of Conduct and Ethics.
The creation of this new code makes it evident that Home Depot takes pride in its investors and creditors. This indicates that Home Depot is taking initiatives to improve its ethical performance despite its recent struggles with ethical behaviour.
Home Depot is dedicated to ensuring that its code of ethics is followed by every individual in the company. After discussing the ethical issues the company has had recently and the years before, it is safe to say that it is ranking as a C for an adequate code of ethics, because the company has a code of ethics and it tries its best to ensure that it is followed by all of its employees/associates, managers and officers.
Some examples of when Home Depot was accused of inappropriate practices that violated their own business code and conduct of ethics include, when employees were accused of bribery made against corporate purchasers, terminating employees because of religious affiliations and trying to bolster revenue. In 2007, after having one of the largest ethical scandals Home Depot has faced in recent years, the four employees of the company that had been involved were immediately terminated by the company. The case regarding an employee’s religious affiliations was taken to court due to the fact that it was a serious matter, and it was said to be an ethical issue that the company failed to recognize in the eyes of the public. Senior executives at the company have also come out and accused the company of wrongdoing by trying to bolster revenue by incorrectly identifying products as being damaged and receiving monetary credit from its vendors. This has made it difficult for the company and has jeopardized its assignment of ethical ratings.
As seen above the company has faced many ethical issues but the way the company has responded by resolving these issues was tremendous. That is one of the reasons why the company has been given a ranking of C. It is not good to have many ethical issues in your company but since the company has handled the situation in an appropriate way and does not need ‘major’ improvement in writing the code it has performed well overall.
Since the company has written a code of ethics for all of its employees and associates to follow, it indicates the high regard and importance Home Depot places on ethics which is “Doing the right thing each and every day for the benefit of our Associates, customers, vendors, suppliers and the communities we serve is critical to our ongoing success.” (Business) The company has done a tremendous job writing the code of ethics and because of that there is no reason to have it rewritten or changed however, the company needs to improve by getting the message out to the employees and associates of the company by abiding by the code of ethics. Some of the initiatives mentioned above that the company has taken to improve its ethical performance have been worthwhile for the company. The concept of social responsibility and abiding by the code of ethics surely plays a part in Home Depots history, and there improvement has helped them. “Home Depot has adopted a specific Code of Ethics for Senior Financial Officers ("Financial Code of Ethics"), which is in addition to this Business Code of Conduct and Ethics.” (Conduct)
This creation of the new code makes it evident that have impacted the company’s performance and according to Aristotle’s ethics theory which is Aristotelianism, he mentions “These doctrines of the mean help show what is attractive about the virtues, and they also help systematize our understanding of which qualities are virtues.” (Philosophy) He explains the concept of the virtues and how it systematizes the understanding of the company and its employees. Aristotle’s method of reasoning is mainly inductive and because of that he has been called the inventor of the ‘syllogism’. It has been objected that Aristotle’s opinions on the relation of intellectual moral progress, on the comparative excellence of the company and the thought and action on the true functions of the company. According to Aristotle’s view of ethics he has the faculty of liking or disliking, whatever is presented to him on the company. This therefore reaffirms the fact that an organization needs to create and enforce a code that must be followed by the company’s employees, associates, and executives. These initiatives have therefore impacted the company but have stayed strong throughout the company. This has been the philosophy of Aristotle that deals with logic and metaphysics and ethics and poetics and politics” (JSTOR)
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[ 1 ]. http://www.fooqu.com/will-the-home-depot-be-next-to-file-bankruptcy
[ 2 ]. http://abcnews.go.com/Business/wireStory?id=9666674
[ 3 ]. http://www.businessweek.com/news/2010-04-06/home-depot-chief-blake-adding-jobs-for-first-time-in-4-years.html
[ 4 ]. http://www.jstor.org/pss/258977
[ 5 ]. http://corporate.homedepot.com/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gDdwNHH0sfE3M3AzMPJ8MAV0sDKADK
R2LKmxrD5fHr9vPIz03VL8iNKAcAodaFaQ!!/dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfMEcwQUw5TDQ3RjA2SEIxUEY5MDAwMDAwMDA!
[ 6 ]. "CSR Case Study: The Home Depot Giving Back to Communities." CSR Case Study: The Home Depot Giving Back to Communities: 1-19. Commdev.org. Web. 26 Mar. 2010. .
[ 7 ]. CSR Case Study, pg 4
[ 8 ]. CSR Case Study, pg 9
[ 9 ]. CSR Case Study, pg 10
[ 10 ]. CSR Case Study, pg 10
[ 11 ]. http://www.uschamber.com/bclc/haiti_corporatedonations.htm
[ 12 ]. CSR Case Study, pg 11
[ 13 ]. http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
[ 14 ]. http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-govConduct
[ 15 ]. http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-govConduct
[ 16 ]. http://plato.stanford.edu/entries/aristotle-ethics/#EthVirDis
[ 17 ]. http://www.jstor.org/pss/3654082
1984, The Home Depot Inc. stocks are being traded at New York Stock Exchange under the trade symbol of “HD.” Although, The Home Depot Corporation is a very successful company, Home Depot holds some unique qualities which separate it from other business counterparts. It is their values, respect & loyalty towards their customer and the society which makes The Home Depot successful. Today, Home Depot is known as a pioneer in the development of home service improvement products. Their ethics have helped them climbed the ladder of success in recent years. This business is somehow related to the customers’ emotions and expectations. And their current standing in world market itself suggests that they have been on top of their servings. Currently, The Home Depot Inc. ranks in Top 50 for the America’s Most Reputable Companies list on Forbes 2009. The Home Depot Inc. has not only launched promotional campaigns and provided monetary funds for the needy people in society, but has also incorporated ways to save society from natural disasters. According to the Corporation of Natural & Community Service, The Home Depot Foundation has helped the regions impacted by Hurricane Katrina by offering them 11 million for the rebuilding process. They have even launched a few corporate programs which promote their high standards of corporate responsibilities and leadership amongst the people and their own employees. Examples of these corporate programs are “The Home Depot Trade Scholarship Program” and “The Home Depot Community Hockey Program.” Also, Home Depot now has improved by making commitments to carry environmental friendly certified "green" products, all of which make positive statements about the company.
Industry Analysis The renowned Home Depot Corporation is widely spread across North America, China, and other parts of the world with almost 2000 store locations. It is involved in the retail and service business providing consumers with all the help required to create a dream home. The inventory of each store is approximated at 40,000 with over 250,000 other products not present on site. These products can be ordered specially for the consumer from various store locations across the globe. The merchandise available at the different store locations varies due to the fact that each local region has different market needs and it is important that such needs are met for consumer satisfaction. These products range from different kinds of home building materials, improvement supplies, appliances, apparel, and lawn and garden products, amongst other products required to decorate and create your home. Despite making great strides in the retail business, it also offers services of various kinds to fulfill its mission in becoming a top corporation in the home improvement business.
Many customers are not qualified professionals to take on home renovation projects. Home Depot Home Services offers professional help to such customers to professionally complete their project. These include the installation of windows to water heaters, floors to roofs, kitchen cabinets to vinyl siding, and fencing to landscaping. While the Home Depot Home Services program can provide support to the unprofessional customers, it also extends its helping hand towards the professional customers with special services and support to enhance their success through the Serving the Pro Customer initiative. “These customers have access to loyalty programs, a pro bid room to handle large customer orders with volume discounts, direct ship programs, credit programs and other specialty sales initiatives”.(Home Depot …show more content…
website) Contrary to the fact that it is a business focused upon maximizing its revenue, it offers ample of free workshops to help its customers. This is a great marketing strategy to gain new customers, while satisfying the existing ones. At the same time, they are able to promote their various products. Some of these include the free How-To Clinics offered every weekend at every store location. It allows the customers to gain hands-on experience and learn the different techniques involved in home improvement. Furthermore, it also offers the Kids Workshops for free on the first Saturday of each month between 9:00 am to 12:00 pm at all of The Home Depot stores. It is designed for children ranging from the age of 5 to 12 and their parents to gain hands-on experience. These free initiatives are beneficial for both the customer as well as the corporation. Thus, it is evident that The Home Depot has become one of the largest corporations in the globe in the home improvement business. It has fulfilled its mission of providing the customers with all the help and support required to successfully create a dream home.
Financial and Stock Market Performance
Home Depot, a home improvement retailer, has been in business for three decades. The secret behind their success is their service to customers. However, lately, Home Depot is struggling to make profit due to poor economic conditions "Home depot quarterly sales are down 6.2% with a reported net income of $756 million which is down from $1.09 billion". As a result, their stock price decreased and upset their shareholders.
Recession has caused Home Depot to lose big amount of money. Therefore, the corporation is finding cost cutting strategies to recover the cost. These strategies include layoff of thousands of employees from several stores, cutting pilot programs, support positions and closing of 54 stores around the country. This will help them to save money on wages and other expenses from closing the stores.
Home Depot is confident about their sales in this year.
Home Depot is adding new inventory in high profited stores to double the profit. As a result, they are forecasting sales to be double as well. They have also added few jobs in high populated are to meet the demand. They are looking forwards to make profit in this new year.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility is a business plan and sometimes refers as corporate responsibility. This business model describes the social responsibility of corporations towards the society and environment. Corporate Social Responsibility concept has been used by many businesses as it encourages community growth and development. In addition, it allows a number of corporations to voluntarily reduce harmful activities in the society.
The Home Depot was founded in the year of 1978 by four individuals: Bernie Marcus, Arthur Blank,
Ron Brill, and Pat Farrah. The main purpose of these founders were to make money and keep shareholders happy. On the other hand, founders also believed in doing charitable work for the society. They wanted to give back to society by helping the deprived ones. Therefore, Home Depot decided to create a CSR policy in 1991. This CSR policy mainly focused on helping communities with housing, natural environment, helping youths and natural disaster
victims.
Affordable Housing
Maintenance of a house can be financial burden for many low-income families. Home Depot realized this issue and decided to invest their funding for low-income families. Thereafter, they created affordable housing program. This project allows Home Depot to build and repair houses for low-income families. Recently, Home Depot has donated more than $25 million for this project and contributed more than $150 million for housing program, to date.
Environment
In 1990, Home Depot created this program to protect our natural system. This program provides financial support to non-profit organization with their environment related issues. The non-profit organizations work includes forestry and ecology, green building design, clean-up and recycling, and lead poisoning prevention.
Youth at risk
This program focuses on providing children with a safe place to learn and acquire significant life skills. This program also teaches construction techniques and problem solving skills to young adults. Moreover, this program helps children to develop self-esteem and leadership qualities. In addition, this program allows young individuals to contribute in community service event.
Home Depot has also created YouthBuild program in USA. This program has been created to help youth who have earned their diploma from college. This program teaches youth to make affordable housing, schools, community centre, and other renovation projects with their construction skills. Currently, with the help of this program, more than 6000 individuals are receiving their diploma while working on numerous renovation developments.
Disaster preparedness and relief
Home Depot offers this program to teach customer on how to face emergencies. This program also provides financial funding to communities in disaster states. This program partners up with many relief organizations to support international countries.
Home Depot made their first contribution towards this program in 2001, when they donated $75,000 to low-income families to deal with energy crisis. Recently, the corporate donated $100,000 for Haiti earthquake.
The corporation, Home Depot has always believed in a great charitable work, as they are involved in a number of projects relates with youth, environment and natural disaster. In addition, Home Depot is the first corporation that came up with the idea of saving natural environment and helping youth to become better, in its sector. Their contribution in the society has changed many lives.
Enough for the society? The concept of corporate social responsibility surely plays a part in the Home Depot culture as they contribute towards their CSR projects. On the other side, Home Depot also support Milton Friedman’s concept of making money for shareholder and keep them happy. Home Depot keeps a nice balance between Friedman`s theory and their CSR projects. This balance is the reason behind their low contribution towards the society. Home Depot also does not like that their charitable projects covered by media, as they do not intend to gain anything out of it. Due to this reason, sometime they do not disclose their contribution amount in public.
In the latest edition of its Business Code of Conduct and Ethics, Frank Blake, Chairman and CEO of Home Depot, starts his address to stakeholders of the company by declaring:
The Home Depot has a strong commitment to ethics and integrity, and our core values define the means by which we do business. Doing the right thing each and every day for the benefit of our Associates, customers, vendors, suppliers and the communities we serve is critical to our ongoing success.
Blake’s statement indicates the high regard and importance Home Depot places on ethics. From reading its outline of the Code, it is evident that Home Depot is dedicated to ensuring that ethics is a large part of the company’s business platform. Using this Code as the foundation in which in conducts it’s day to day business, Home Depot relies on its employees to conduct themselves appropriately and adhere to this code of conduct. Despise its strong commitment and efforts to raise awareness on its stance on ethical behaviour, Home Depot has been accused of some less than appropriate practices that violate its Business Code of Conduct and ethics. One of the largest ethical scandals Home Depot has faced in recent times relates to the bribery accusations made against corporate purchasers for the company. In 2007, Home Depot terminated four employees for taking bribes from an Asian vendor. Clearly, these employees were not following Home Depot’s Code. More specifically these employees were not living the values of Home Depot, one of which is “Doing the right thing.” Following up on this issue, Home Depot released a statement on its continued commitment to maintaining ethical standards. It reads: “Maintaining our ethical standards is of utmost importance to The Home Depot and is something we enforce strongly.” With the termination of these employees, Home Depot shows its value for following the Business Code of Conduct and Ethics. Had these former employees read and understood the Code, their jobs could have been saved and this bad press for the company could have been prevented. In the Code, an excerpt from its policy on receiving gifts and entertainment states:
The Company has a zero tolerance policy for receiving gifts and entertainment when there is any chance that the purpose is to: improperly influence the recipient; violate the Company’s Policies; or violate the law. Gifts and entertainment apply to anything received as a result of an actual or potential business relationship.
Clearly the employees have violated the terms of the Code and Home Depot did the right thing when the company terminated the employees in question. While most will agree that the company was right to terminate the employees in the situation above, the company has also come under fire for accusations of wrongful dismissal.
Trevor Keezer, a former employee, is accusing the company of terminating him because of his religious affiliations. According to Keezer, he was dismissed for wearing an American flag button on his Home Depot apron that read “One nation under God, indivisible.” Under the labour and employment section of its Code, it states, “The Home Depot will not discriminate against any Associate or applicant with regard to race, color, gender, sexual orientation, age, religion, national origin, disability or any characteristic protected by applicable law.” However, this case is not as cut and dry as the last example as arguments could go both ways: Should the employee adhere to the company’s dress code or is the ability to express his religious views of higher importance? These difficult questions raise ethical concerns for the company and a conclusion cannot be made without upsetting some stakeholders involved in this situation. Including these issues with its employees, Home Depot also has been hit hard by accusations that it cheated its vendors. Senior executives have come out and accused the company of wrongdoing by trying to bolster revenue by incorrectly identifying products as being damaged and receiving monetary credit from their vendors. In a statement released by the company, Home Depot defends itself by proclaiming:
The Home Depot values its relationships with all of its suppliers. Our return-to-vendor practices are subject to contracts that vary vendor by vendor and we respect all such obligations. Our internal financial controls related to vendor policies and inventory accounting preclude[s] any potential for a material adverse impact on the company.
If these allegations prove to be true, Home Depot can be in violation of its Code. Under the section titled “Commitments to Our Vendors and Suppliers”, it states:
“We will be professional and fair in all of our dealings with our vendors and suppliers. We will select business partners whose values and business practices are compatible with our own high standards so that we can build lasting relationships that enable us all to grow and prosper in a competitive marketplace. Consultants, agents and representatives of The Home Depot must conduct their businesses in accordance with our policies as well as relevant laws and regulations.”
This issue also questions Home Depot’s business ethics but also provides amble opportunity for Home Depot to rectify and recover from damage this situation has done to its reputation. Although these ethical dilemmas and challenges the company has faced in recent years highlight some concerns, it is evident from the outcomes of these situations that the code is being following to some extend by management at Home Depot. The company is still being targeted and not being viewed favourably amongst business ethicists. One writer on business ethics critic, Robert Blatchford, asserts “Home Depot’s “code” dictates ALL employees/associates, managers and officers must abide by the “code” or face severe disciplinary actions up to and including termination.” He goes on to explicitly state, “Home Depot can’t be trusted - take your career, investment and purchases elsewhere.” Although the opinion of one person cannot speak for an entire population, Blatchford’s opinion is shared amongst many and is representative of a general consensus.
Like other high profile retailers in North America, Home Depot is bound to come across various ethical issues that it must address. Still, it’s Business Code of Conduct and Ethics is well documented and written, and should be used by other organizations as an epitome to model ethical standards. If it continues to follow the Code and act on its mistakes, Home Depot will have no problem in addressing ethical concerns in the future. As a company that is publically traded in major stock exchanges, Home Depot’s financial statements are constantly under the public eye and monitored by top auditors to ensure that strict standards are followed. By following these strict standards, the company remains a valuable investment for present and future shareholders. With these strict standards of operating, Home Depot hopes that shareholders and creditors will trust its current financial position as valid and without management bias. Even with these efforts to prevent wrongdoing and continue these relationships with its shareholders and creditors, Home Depot has had its share of recent troubles with its investors and credit providers. In one highly publicized case, Home Depot’s shareholders were angered over compensation of top executives. Former CEO Bob Nardelli was accused of taking excessive compensation even though the company’s stock was suffering. One organization that took a stand against this is the American Federation of State, County and Municipal Employees. According to the organization’s website, “AFSCME’s 1.6 million members provide the vital services that make America happen and advocate for prosperity and opportunity for all working families.” In a rally against Home Depot, this organization played a key role in displaying their displeasure. One demonstrator chanted, "Hey, Nardelli! Your stock price turned to jelly!" In its Business Code of Conduct and Ethics, Home Depot asserts, “We will conduct our business and ourselves in a way that enhances and preserves the reputation of the Company while providing our shareholders with a fair return on their investments.” Home Depot may be violating their Code as the company is providing excessive compensation, according to the shareholders of the company. This is one example of ruining relationships with shareholders and can be very detrimental for the future of the company. In another incident Home Depot’s executives came under fire for missing an important shareholder meeting. Nardelli, who was already accused of being paid as the company’s stock fell, also “reportedly cut off shareholders after one minute and refused to answer many questions, this was a public relations nightmare.” With his refusal to answer questions, Nardelli didn’t help the already suffering image of the company. The company has also been victim to harsh criticism of several non-governmental organizations. According to the Ethical Leadership Group, an organization that promotes ethical behaviour, the ethical code of a company plays a vital role. In a statement on its website, the organization states:
Codes of Conduct are the foundation of any organization's ethics and compliance initiatives yet they often sit on a shelf or in a drawer, or are tossed out without being read. There are a number of reasons for this. One reason is that some employees don't believe their leaders practice what they say in the Code. A well-written Code won't help in this situation. Another reason is that the Code is poorly written - focused only on legal compliance; appearing to be designed to protect the company only; and not relevant to employees' day-to-day work.
This statement reaffirms the fact that an organization needs to create and enforce a code of ethics that must be following by top executives and front like employees alike. In addition to its general code of ethics, Home Depot has developed another financial-specific code. The purpose of this code states:
It is The Home Depot's intention to provide all stakeholders with the highest degree of confidence that its financial control systems are implemented and maintained by Senior Financial Officers who exhibit the highest degree of integrity and are free from actual or apparent conflicts of interest. Therefore, The Home Depot has adopted a specific Code of Ethics for Senior Financial Officers ("Financial Code of Ethics"), which is in addition to this Business Code of Conduct and Ethics.
The creation of this new code makes it evident that Home Depot takes pride in its investors and creditors. This indicates that Home Depot is taking initiatives to improve its ethical performance despite its recent struggles with ethical behaviour.
Home Depot is dedicated to ensuring that its code of ethics is followed by every individual in the company. After discussing the ethical issues the company has had recently and the years before, it is safe to say that it is ranking as a C for an adequate code of ethics, because the company has a code of ethics and it tries its best to ensure that it is followed by all of its employees/associates, managers and officers.
Some examples of when Home Depot was accused of inappropriate practices that violated their own business code and conduct of ethics include, when employees were accused of bribery made against corporate purchasers, terminating employees because of religious affiliations and trying to bolster revenue. In 2007, after having one of the largest ethical scandals Home Depot has faced in recent years, the four employees of the company that had been involved were immediately terminated by the company. The case regarding an employee’s religious affiliations was taken to court due to the fact that it was a serious matter, and it was said to be an ethical issue that the company failed to recognize in the eyes of the public. Senior executives at the company have also come out and accused the company of wrongdoing by trying to bolster revenue by incorrectly identifying products as being damaged and receiving monetary credit from its vendors. This has made it difficult for the company and has jeopardized its assignment of ethical ratings.
As seen above the company has faced many ethical issues but the way the company has responded by resolving these issues was tremendous. That is one of the reasons why the company has been given a ranking of C. It is not good to have many ethical issues in your company but since the company has handled the situation in an appropriate way and does not need ‘major’ improvement in writing the code it has performed well overall.
Since the company has written a code of ethics for all of its employees and associates to follow, it indicates the high regard and importance Home Depot places on ethics which is “Doing the right thing each and every day for the benefit of our Associates, customers, vendors, suppliers and the communities we serve is critical to our ongoing success.” (Business) The company has done a tremendous job writing the code of ethics and because of that there is no reason to have it rewritten or changed however, the company needs to improve by getting the message out to the employees and associates of the company by abiding by the code of ethics. Some of the initiatives mentioned above that the company has taken to improve its ethical performance have been worthwhile for the company. The concept of social responsibility and abiding by the code of ethics surely plays a part in Home Depots history, and there improvement has helped them. “Home Depot has adopted a specific Code of Ethics for Senior Financial Officers ("Financial Code of Ethics"), which is in addition to this Business Code of Conduct and Ethics.” (Conduct)
This creation of the new code makes it evident that have impacted the company’s performance and according to Aristotle’s ethics theory which is Aristotelianism, he mentions “These doctrines of the mean help show what is attractive about the virtues, and they also help systematize our understanding of which qualities are virtues.” (Philosophy) He explains the concept of the virtues and how it systematizes the understanding of the company and its employees. Aristotle’s method of reasoning is mainly inductive and because of that he has been called the inventor of the ‘syllogism’. It has been objected that Aristotle’s opinions on the relation of intellectual moral progress, on the comparative excellence of the company and the thought and action on the true functions of the company. According to Aristotle’s view of ethics he has the faculty of liking or disliking, whatever is presented to him on the company. This therefore reaffirms the fact that an organization needs to create and enforce a code that must be followed by the company’s employees, associates, and executives. These initiatives have therefore impacted the company but have stayed strong throughout the company. This has been the philosophy of Aristotle that deals with logic and metaphysics and ethics and poetics and politics” (JSTOR)
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