Home Depot Organizational Authority

As the effects of the recent economic downturn recede, industries are making their way back into the retail market including home improvement stores (Moneytips, 2015). It would appear that the trend is to renovate an existing dwelling rather than tempt fate on the housing market (Moneytips, 2015). This is positive news for those renovation retail organizations such as Home Depot as this organization has seen a four percent rise in annual growth the past five years (IBISWorld, 2015). However, organizational performance does not rely on sales alone, and an organization must find a firm balance between the power of management and successful output to remain competitive (Jones, 2007).

Organizational Authority

The ability of an organization to

Decision-making authority can reside at the highest level of executive authority in an organization or delegated from the higher level to the lower levels of the organization (Jones, 2007). The descriptions of these measured levels at which organizational decision-making flows are centralized and decentralized (Jones, 2007). In the centralized authority structure, the highest level executives make the organizational decisions, often leaving front-line managers with no ability to improve or adjust procedures; whereas, in the decentralized structure, managers (and some employees) have the authority to make decisions to make the necessary production adjustments at lower levels (Jones, 2007). For example, managers with little decision-making authority lack the freedom to develop their own skills to manage tasks in an efficient manner thereby slowing organizational performance (Jones, 2007). Conversely, managers that possess more decision-making authority can take risks to accommodate improvement in operations (Jones, 2007). For example, the Home Depot accepted an opportunity to restructure the organization to improve its operations by changing their structure to a decentralized one (CSU-Global, 2015). This decentralized approach

Moreover, the organization must consider its environment and any uncertainties (Jones, 2007). Organizations that strike equilibrium between levels of management and decision-making authority have success at managing unknown circumstances thereby limiting the variance between them because the organization accounts for the possible outcome (Hernaus, Aleksic, & Klindzic, 2013; Jones, 2007). For example, when Home Depot restructured its authority to a more centralized form, it also made improvements on the products it was carrying in the store (CSU-Global, 2015). By improving its products, its ability to report sales activity to executives, and focusing on the consumer’s wishes, the organization saw improved performance (CSU-Global,