Home Depot Stakeholder Orientation

The attributes of the stakeholder on the basis of Home Depot’s response to environmentalist issues can be measured in their power, legitimacy, and urgency. They possess power because they are willing to not shop at a company that is not environmentally responsible, so this put greater pressure on Home Depot to certified by the Forest Stewardship Council (FSC) and continues to keep them “honest” as far as their environmental contributions and practices. The stakeholder has legitimacy because they want to make sure that Home Depot’s appearance of being environmentally responsible is not a sham, so they force them (power) to get certified and make sure they rank high comparatively on company’s environmental responsibility lists.

They have urgency, because they wanted Home Depot to respond immediately to the growing need for large corporations to be economically responsible. As far as Home Depot’s strategy and performance with environmental and employee stakeholders, I believe that overall Home Depot is using a Proactive approach and doing more than is required by the industry. For instance, not only have they gotten certified and donated millions to relief funds and the Red Cross organization, but they are also donating volunteer hours and hosting workshops for women, children, and people who are buying new homes. These activities, along with their massive contributions to many charities and relief efforts, earned them an A on the Council on Economic Priorities Corporate Report Card and a Proactive on their new business approach to be environmentally and socially responsible.

As a publicly traded corporation, Home Depot can justify budgeting so much money for philanthropy because that is what shareholders like to see in a company. Since in 2007 Home Depot suspended a stock buy-back program in order to avoid losses and prevent borrowing money, the stakeholders need something to hold onto and they, especially customers, feel good about a company that actively commits resources to environmental and social issues. Home Depot might also benefit from providing funds to help save the rainforest and other such lumber filled areas in order to put them in the spotlight. Since they cannot gain form anything in the rain forest area anyway, and since they would benefit immensely form the positive publicity and the appearance of them setting aside money in a recession to help save trees, it puts them in an even better position with customers. They could even go so far as to claim they are the only lumber sales cooperation that can boast they help save as many trees as they cut down. I believe that this would also appease many of people’s other concerns about Home Depot’s environmental responsibility is concerned.

Home Depot’s recessionary strategy of eliminating debt and halting growth is a wise one for Home Depot. The reason that their strategy is a wise one compared to Lowe’s strategy of expansion is because they are number one with only their back to watch, while Lowes is number two and can only look forward. In effect, Lowes is taking more of a gamble with their strategy since they might over expand, which could result in huge losses and might even put be enough to pull them under should they get caught in the tail end of the recession. Home Depot however, already has their position secured and their strategy can neither benefit nor hurt them, it will most likely put them right back where they were before the recession hit. The reason I believe this is more beneficial is because they will be debt free and stemmed potential losses. Also, since they were already number one, they will secure this position and will continue to strive once the recession has subsided and people are spending again. Also, even though Lowes aggressive strategy might pay off in the short term once the succession subsides, once Home Depot and other department stores are put back in the race, they may end up having to cut costs once again and end up closing most of the stores anyway.