Running Head: EXECUTIVE REPORT

Executive Report Grand Canyon University LDR 625 Team Blue November 26, 2011

EXECUTIVE REPORT Schein describes three levels of culture, starting with the visible to the invisible (2009). Culture is the manifestation of how a company operates, but it is not that simple; culture exists

on several levels. The three levels as described by Schein (2009) are artifacts, espoused values, and underlying assumptions. Artifacts are the things you see, feel, and hear when entering an organization. Espoused values are the philosophies of an organization; it is the strategy and goals. The underlying assumptions are unconscious beliefs, the thoughts and feelings held by the workers; this is where ones values live. This executive report will compare and contrast two organizations, Home Depot and Umpqua Bank using Scheins three levels of culture. Artifacts Home Depot had started with the intention of being a warehouse superstore, where the customer was king. It started with its orange box structure, low lighting, cluttered isles, and sparse signage; this was quite deliberate, according to Founders, Marcus and Blank (Charan, 2006). While the structure has remained the same, under the new leadership, and tough competition from Lowes, they needed to market to the female buyer. They needed better signage, improved lighting, and less cluttered isles; this proved to be a step in the right direction. This was in stark contrast to Umpquas pristine, fashion boutique-like appearance. The large window storefront, available internet computer stations, living room-like lobby, coffee kiosk, and merchandise booth sure did not give the impression that the customer would be here simply to make a deposit. That was just the point; stay, sit, have coffee, check your email- and bank. Davis and his team worked to achieve this with the newly acquired buildings; very consciously worked to maintain the emotional response felt when entering one of Umpquas stores (Grind, 2010).

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Espoused Values Home Depot had a very strong start-up philosophy; they were passionately committed to customers, colleagues, the company, and the community (Charan, 2006). They were; however, very focused on the success of the individual store, not the organization as a whole. Going from good to great would prove to be a great challenge, as the culture was viewed, by the managers, to be quite successful. Nardelli would need to change the social architecture (Charan, 2006); realizing this would require a new vision, a new plan, and a new attitude. Umpqua bank had similar challenges but a different approach. While they realized that corporate culture was largely responsible for their success; maintaining this while growing would prove to be a great challenge. The service mindset would be remarkably similar in both corporations. Umpqua believed that culture was so significant; they created a position to manage it. Nardelli, on the other hand communicated the new vision, established training programs, and monitored progress with weekly meetings. Both corporations contributed large amounts of resources to culture; both felt that future successes depended on it. Umpqua hired Ziba, assisting them with defining five design principals, providing further clarity about brand identity (Grind, 2010). Umpqua would spent time and energy to define its mission, as it related to the customer, their employees, their shareholders, and their communities. This is remarkably similar to Home Depot. Both organizations had strong beliefs in supporting the communities they serve; this continues to be a focus today. Underlying Assumptions Home Depot had great managers that followed the philosophies established by founders Marcus and Blank (Charan, 2006). What they also had, were managers who did not value

EXECUTIVE REPORT paperwork, or anything bureaucratic (Charan, 2006). Conversely, Umpqua greatest assets were its old-timers (Grind, 2010). They were the foundation for moving the culture forward. Davis

would rely on them, as well as his newly appointed executive level position, a full-time manager for culture. Home Depot would operate as 200 individual stores, seeing their strategy as wildly successful; this belief limited growth and stifled corporate teamwork. This belief would be Nardellis greatest challenge; he would tackle this by expecting and modeling accountability. Umpqua knew their culture was the winning ticket; they knew they had to foster those beliefs in the acquired staff. Nardelli would take on this challenge by creating buy-in from his managers; new beliefs that would come with a strong sense of accountability. He created this new belief system, Umpqua worked to maintain their belief system.

Organization Culture of Umpqua and Home Depot Organizational culture is the personality or unwritten laws of an organization (Edgar, 2010). This has a major role to play in the general performance of an organization. One of the factors to look at includes relationship between superiors and subordinates, language used, and other various aspects like organizational structures. Changing a culture may be an expensive program. This is illustrated by Umpqua Bank with a billion dollars at stake; therefore positive culture needs to be maintained with all of its acquisitions. Different companies have different cultures, which will be discussed here in the light of the Hofstedes dimensions. Masculinity When both managers of Home Depot and Umpqua Bank took office, their first initiative was to address organizational cultures, so as to make the companies more competitive. This was a common goal and therefore each of the companies embarked on initiatives to ensure that its

EXECUTIVE REPORT culture was enhanced. Both companies gave the mandate to different individuals who are males thereby indicating the gender bias in the two companies. Home Depot hired Dennis Donovan, while Umpqua Bank promoted Steve May, creating an executive level position specifically to address culture, suggesting Umpquas belief in their culture. Low Uncertainty Avoidance Both of the companies embarked on an environmental mission, suggesting they are change oriented, and are ready to take risks. Umpqua Bank ensured that it cleaned all its surroundings, creating an image of order. It also refurbished its structures to ensure that the

image of the company, the Pearl store, was duplicated, given the appropriate budget (Freeze n.d). This was accomplished by changing the structures, duplicating the experience. They created associates, who performed all tasks related to banking; they were empowered to make decisions on the spot. On the other hand, Home Depot addressed its environmental issues, such as low lighting and cluttered isles. Other changes included improving sparse signage (Charan, 2006). These changes in structures, which are part of an organizational culture, enhanced improvement in the performance of both companies. There was a major difference on how both companies implemented their policies of changing the organizational structure. Umpqua Bank set aside a budget, while Home Depot implemented their improvement process without interrupting the companys operations. This played a major role in ensuring that business as usual is maintained, even in a period of transformation. Low Power Distance Language and relationship between the company officials is another important aspect that both companies undertook. Relations between the members, especially their attitude about

EXECUTIVE REPORT communicating, played a major role in ensuring that the goals and objectives were met. Home Depot ensured that it installed a sense of accountability among all members of the organization. Those employees who were not ready to comply with the new condition were swept out of the company (Charan, 2006). This showed how this aspect of culture was important to the overall performance of the company. Home Depot applied an important tactic to ensure that resistance from the employees did not win out to cultural change. The leaders of Home Depot conducted

various meetings with all stakeholders to ensure employees understood the benefits the company will accrue from these changes. On the other hand Umpqua Bank generalized its philosophies; new employees came to uphold. Providing clarity for its brand signaled a new change in the company, and was welcomed by the employees (Edger, 2010). Both companies ensured that they install a positive belief to their employees. A change in the perceptions by their customers, toward their products, gave both companies the upper hand in regards to market share. This played a major role in boosting the company sales (Edger, 2010). Individualism The two companies encouraged collective relationships, yielding employees that are close, relate well, thereby contributing to smooth operations. In conclusion, the culture at the two companies has some similarities. Home Depot had to evolve what some believed to be a winning culture; Umpqua needed to generalize what was a winning culture to its acquisitions.

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Reference Charan, R. (2006, April). Home Depots Blueprint for Cultural Change. Harvard Business Review, Product 4079 retrieved from www.hbr.org Grind, K. (2010). Umpqua banks rapid growth in Washington: more ahead. Banking & Finance retrieved from http://www.bizjournals.com/seattle/stories/2010/04/05/focus1.html Schein, E.H. (2009). The Corporate Culture Survival Guide. San Francisco, CA: Jossey-Bass