The goal of this report was to not only write a professional business report, but to compare the corporate culture of two competing companies.
When choosing a career a person has many decisions to make. What do I want to do? How will I succeed? What are my long term goals? One of the most important factors people tend to omit is what company they would like to work for.
The purpose of this report is to analyze two public companies that operate within similar industries, Lowe’s Companies Inc. and Home Depot. The information in this report will help steer potential readers in the right direction when they are trying to choose a career with either of these companies.
Our team has explored the corporate culture, employee benefits, human resource practices, diversity, and community involvement that surround each company. In the report you will find expanded research on both companies in each segment which will help aide in making a decision as to which company will be better suited to begin a career with.
The major limitation in this report was the time constraints that prohibited us from fully investigating the corporate culture of each company. We also ran into some roadblocks when the group tried contacting each company’s corporate office for information regarding hiring practices. One of our sources, Vault.com, gave us some trouble when trying to view the website’s full content. They required an eighty-three dollar subscription to access some parts of the site. Although we were able to pull some information from the site without paying the fee, the full content was still unavailable.
The group consensus was that Home Depot would be the better company to work for due to the fact they are the worlds largest home improvement retailer.
History and Background
Lowe’s is the world’s second largest home improvement retailer. The company offers a complete line of products and services for home decorating, maintenance, repair, and remodeling for commercial and residential buildings (marketline.com, May 28, 2007). Lowe’s is headquartered in Mooresville, North Carolina. It was founded in 1946 when Carl Buchan and James Lowe began the chain as a small town hardware store. The company became public in 1961, offered its stock on the New York Stock Exchange in 1979, and had its first billion dollar sales year in 1982 (Lowes.com, May 28, 2007).
Home Depot is the largest home improvement retailer in the world. The company sells a wide assortment of building materials, home improvement supplies, lawn and garden products and “do-it-yourself” support, as well as providing a number of services to residential and commercial consumers (marketline.com, May 29, 2007). Home Depot has its headquarters in Atlanta, Georgia. Much newer than Lowe’s, Home Depot was started in 1979 by Bernie Marcus and Arthur Blank. The company went public in 1981 and was offered on the NYSE by 1984. In 1986, four years after Lowe’s hit the billion dollar mark, Home Depot also hit the mark. (NYJOBS.com, May 28, 2007).
With the United States housing market’s built in demand, both Lowe’s and Home Depot have the possibility for a bright future. In 2007, Lowe’s is ranked 45th on the Fortune 500 list, Home Depot is performing even better, coming in at 17th (CNNmoney.com, June 3, 2007). At this time, both companies are doing extremely well in their respective markets. Lowe’s recorded revenues of $46,927 million during 2007, an increase of 8.5% over 2006. The operating profit of the company was $5,152 million during the fiscal year 2007, an increase of 10.7% over 2006. The net profit was $3,105 million in the fiscal year 2007, an increase of 12.3% over 2006 (marketline.com, May 29, 2007). Home Depot recorded revenues of $90,837 million, during 2007, an increase of 11.4% over 2006. The operating profit of the company was $9,673 million during the fiscal year 2007, an increase of 3.3% over 2006. The net profit was $5,761 million in the fiscal year 2007, a decrease of 1.3% over 2006 (marketline.com, May 29, 2007).
Home Depot’s financial numbers are considerably larger than that of Lowe’s, but as the percentages show, Lowe’s is committed to expanding its market share by building new stores and expanding already existing locations.
Home Depot currently operates 2,147 stores with locations in all 50 states, including the territories of Puerto Rico and the Virgin Islands. They also have stores in Canada and Mexico (marketline.com, May 29, 2007). With the acquisition of the Chinese retailer, The Home Way, Home Depot has officially made the voyage of expansion overseas. This astonishing coverage of nearly every corner of the globe is what has given Home Depot the tag of largest home improvement retailer in the world.
Lowe’s currently operates 1,385 stores in 49 states, with a total of 157 million square feet of selling space. The company runs two sizes of stores for its two different markets. In the larger, more profitable markets, they have 117,000 square foot warehouses. For the smaller, but still lucrative markets, they have 94,000 square foot warehouses (marketline.com, May 29, 2007). Recently, CEO Robert Niblock has assembled a strategic team to assess the opportunities overseas. This pleased many investors and showed that the company is committed to the future.
With all the things going for these two companies there is a lot of competition to have the largest market share and best brand image. Each company has researched these areas tremendously to see where they do well, where they can improve, what will happen in the future, and what could hurt their profits. They do this in the form of a S.W.O.T analysis. This is a marketing research tool used by companies to measure strengths, weaknesses, opportunities, and threats that they may encounter.
Lowe’s mission statement is straightforward: “Home. For over 50 years, it’s what Lowe’s has been about. Lowe’s vision is to be our customer’s first choice for home improvement in each and every market we serve. To earn our customer’s trust and meet their needs, we will provide valued solutions with the best prices, products and services that make our customers’ lives easier”(Lowes.com, June 2, 2007).
Home Depot defines its mission as, “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 and our eight core values include the following: Excellent customer service, Taking care of our people, Giving back, Doing the “right” thing, Creating shareholder value, Respect for all people, Entrepreneurial spirit, and Building strong relationships”(Homedepot.com, June 2, 2007).
A company’s corporate culture is a key factor in determining whether a company meets qualifications for an individual seeking employment. Lowe’s and Home Depot may be in the same market, but the culture of a company is one important factor when making the decision to accept a position. When one is researching a company to make sure one is right for the job one must make sure their qualifications are right for the company and the company culture is right for them.
Lowe’s Corporate Culture
Information on Lowe’s corporate culture was unavailable in our research. We contacted Lowe’s Companies, Inc. via telephone, and spoke about the company with a Public Relations manager, but the representative stated that information was not allowed to be given out. Although we did not find any details on the corporate culture of Lowe’s, we did discover that the main focus of Lowe’s culture is diversity and inclusion. Attempts to retrieve any other information from internet and magazine sources yielded no results.
Home Depot’s Culture
The corporate culture of Home Depot is based around teamwork and respect in both the business and the community. Home Depot strives to create a working environment to make everyone feel respected and valued. The company also offers equal access to growth and development opportunities. Through Home Depot’s commitment to diversity, they state that “everyone has value, regardless of gender, ethnic, or educational background” (Homedepot.com, June 2, 2007). A strong relationship with associates, communities, and customers is one of the many factors that Home Depot values about its culture. Treating those associates, communities, and customers as partners, instead of outsiders, is what Home Depot feels is the key to success.
Home Depot expresses good judgment with the belief of “doing things the right way” instead of “doing things right.” The culture of Home Depot is referred to as “orange-blooded”, expressing the company colors and commitment. This “orange-blooded” culture was formed to encourage involvement, passion, and respect for not only the company, but other areas of life such as volunteering and giving back.
Along with establishing Home Depot’s corporate culture, the company pursues corporate responsibility to its customers, owners, and employees. The corporate level strives to get the best products for its customers, provide the best working environment for its associates, make the best influence in the community (including Canada and Mexico) and provide shareholders with excellent returns.
Currently being lead by CEO Frank Blake, Home Depot hopes to keep its culture and values strong. This was challenged recently when former CEO Bob Nardelli tried to change the culture of Home Depot. However, before Nardelli could make changes to the organization, he abruptly chose to leave the company after becoming angry with the pay package that he was to receive. Home Depot hopes to have a more effective leadership style with current CEO, Frank Blake, who just began his term with the organization in January, 2007 (CNNmoney.com, June 5, 2007).
Both Lowe’s and Home Depot offer a great benefits package for their full-time, part-time, and salaried employees. Both of these company’s benefits packages are rare in reference to other industries in the business world.
Lowe’s benefits package is a leading selling point in seeking a career with this company. For full-time employees the benefits package includes health coverage, life insurance, and a 401K plan. Lowe’s offers a retirement package that help employees retire comfortably and at an affordable price. Lowe’s will match 4.25% of the 6% taken out of one’s check each week. Also, an Employee Stock Purchase Plan is offered for those employees looking to invest in the company. Part-time employees also are offered some benefits which include: limited benefit health plan, dental insurance, term life insurance, and short term disability. Lowe’s, unlike Home Depot, offers an employee discount on company purchases. Also, Lowe’s offers Discounted Auto Purchase Plans through GM and Ford. In addition, Lowe’s offers onsite corporate perks such as: on-site laundry and dry-cleaning services, offsite dry cleaning arrangements, health and fitness fairs, a cafeteria, and shower and locker facilities (Lowes.com, June 7, 2007).
Home Depot Benefits
Home Depot’s benefits package is among the top of the field. Ranging from health coverage to 401K plans, Home Depot has it all. Home Depot offers a variety of perks that cover each employee fully. Home Depot’s employees can retire comfortably with the 401K plan and Employee Stock Purchase Plan. Home Depot offers a 15% discount plan for employees who purchase stock. These options are available for full-time employees from the first day they start, so they can start right away with their retirement plans. Part-time employees at Home Depot are also offered competitive benefits within the industry. They can get medical insurance, which includes dental and vision, which is a rarity. Also, they are offered short-term disability insurance and life insurance. One thing they are missing is the employee discount purchase plan. Like Lowe’s, Home Depot offers relocation assistance for those full-time and salaried employees that are willing to move to stay with the company (Homedepot.com, June 7, 2007).
Both Home Depot and Lowe’s benefits packages are mirror images of each other. There are subtle differences that make Lowe’s better than Home Depot in our opinion. The addition of the employee discount purchase plan might improve the morale of the employees working at Lowe’s or future employees thinking of working for either of these retailers. Also, Lowe’s discount purchase of automobiles is a big plus that Home Depot does not offer.
Shareholder’s Services & Customer Involvement
Both Lowe’s and Home Depot offer a Direct Stock Purchase Plan (DSPP). Also, both companies offer a Dividend Reinvestment plan to go along with their DSPP. Consequently, both companies have a maximum investment of $250,000 in their publicly held stocks. Additionally, both companies offer a dividend. Lowe’s has paid a cash dividend quarterly on their stock since 1961. Lowe’s and Home Depot offer their DSPP online, by phone, or mail, which makes it easier for investors to take advantage of the opportunity. Their plans differ in the minimum amount required for new investors. Lowe’s minimum is $250, while Home Depot’s minimum is $500. Both DSPP’s are very intriguing and are quite similar in structure.
In the Press
Several articles were found about Lowe’s and Home Depot; some being more recent, while other date back a few years. Regardless of what the companies think of themselves, it is sometimes best to get the media and special analyst opinions of organizations and how they operate.
Lowe’s employees seek overtime compensation
In an article published on February 17, 2004, Lowe’s employees were not getting paid overtime wages. According to the article, hourly and salaried employees in the state of Alabama working at Lowe’s stores were not being paid overtime if they went beyond their forty hour week. Employees also explained that store managers would follow the Lowe’s policy of “locking in” store staff at the end of each work day (Article: Lowe’s employees seek overtime compensation). The process of “lock in” was done every work night by the store manager when the store closed. Employees were required to clock out and clean up the store off the clock.
According to the Fair Labor Standards Act, all hourly associates are entitled to compensation at the rate of time and a half for all hours worked beyond forty hours per week (Article: Lowe’s employees seek overtime compensation). Salaried employees were working over forty-eight hours a week, which was a violation of the Lowe’s contract. Those salaried employees did not receive their overtime pay. The results in this case were not publicized and it is unknown as to whether the employees of Lowe’s store in Alabama received overtime compensation.
Home Depot Needs Makeover
After the departure of Bob Nardelli as the CEO of Home Depot, the company is still trying to recover. When Nardelli began at Home Depot six years ago, he brought in his beliefs in centralized functions and running a tight ship (Weber, 2007). With his management tactics, he increased Home Depot’s profits and revenues during his six year term but he did not cover the basics, customer service.
Customers made complaints about lack of store assistance, employees being unknowledgeable about store items, etc. Home Depot has now begun to loose money while the company is trying to build itself back up to the dominant company it was in the late nineties. Industry analysts believe that Home Depot should first get the employees back to an energized, informed, and excited state then put its focus back on the routine customer, as well as the new customers: the female shopper and the do-it-yourself customer.
Customer and Employee Opinions and Attitudes
When considering employment, one must research the opinions of current and past employees, as well as, past or current customers of an organization. The opinions should include not only employees at corporate level, but also employees at store levels. The corporate offices of each company are supposed to set the tone for the stores; therefore, store level employee’s opinions should be taken into consideration as well. Whether a company is truly sticking to what it says may be determined by researching employees at all levels and getting information on customers’ attitudes of their experiences.
Lowe’s Customer Opinions
A common issue that most of the public has with Lowe’s is store employees assuring a customer that Lowe’s has an item and by the time the customer has reached the store, the employees state that the item is not there. A customer had this issue with Lowe’s four times and did not get any sympathy from the management. Many consumers have reported that Lowe’s has employees that are unknowledgeable about products and are not trying to assist the customer at all. This problem has been reported throughout the nation and customers have discussed the issues with management, but customers have yet to see any changes. The stores have been installed with “Help” buttons throughout the stores that customers can press when assistance is needed. The “Help” button announces over the speakers that assistance is needed in a certain area and the automated voice repeats every five seconds. Although the announcement is being made, it is rare that an employee will be there within a short period of time. One customer recently reported that is took twenty minutes for someone to assist him and then the employee had an attitude (my3cents.com, June 8, 2007). Customers who have been reporting the service of Lowe’s have completely turned against the company and has now began to shop at the companies’ number one competitor, Home Depot. This should be a major concern for Lowe’s but no real changes are being made.
Home Depot Customer Opinions
In an article titled, “A Citizen’s View of Home Depot, NOT in Our Hometown: the Orange Wars,” citizens throughout the nation stated that they have fought to try and keep the Home Depot retailer out of their community. The article mentions several stories of protest and court appearances to keep Home Depot from building in their hometowns. The reason for most citizens fighting is the fact that a large retailer will run the smaller businesses out of business. Many have stated that the development of Home Depot made the smaller businesses, such as True Value, Handy stores, and area nurseries disappear (“A Citizen’s View of Home Depot, NOT in Our Hometown: the Orange Wars”, 2007).
There have been cases in North Carolina that cite how the public has tried to fight against Home Depot. The article describes the situation with Home Depot coming to Greensboro in 1994. Citizens of Guilford County fought to keep Home Depot out, but the courts eventually passed the act for rezoning. Another situation similar to the Greensboro case happened in Burlington, North Carolina.
Citizens of the Alamance Road area of Burlington protested the coming of Home Depot because there was no need for it. There was a Lowe’s and a Wal-Mart only two miles away from the possible Home Depot location. Citizens felt that Home Depot should not try to use its competitive strategy in the area, especially since the construction of the Home Depot in Burlington resulted in the deconstruction of a church and several homes that had been standing on the site for a number of years. The bottom line is that Home Depot seems to have priority in a rezoning act.
Lowe’s Employee Opinions
From researching Lowe’s employee opinions, there seems to be a mix of positive and negative thoughts of the company from store level to corporate level. According to workplace surveys posted on vault.com, employees have described working for Lowe’s as a pleasure, with opportunities for advancement, to the “worst job ever”. Many described the corporate culture as being relaxed with a strong emphasis on teamwork. Others who took the survey also reported that management at store level was changed on a regular basis and that there was “new management every time you turned around; some good, most bad” (Vault.com, June 8, 2007). Individuals who reported their opinions at the corporate level mostly had better things to say about the company. Many described Lowe’s as a great place to work with opportunities for all cultures. A business associate stated that “the corporate culture is very relaxed. No body stays after 5pm” (Vault.com, June 8, 2007).
Home Depot’s Employee Opinions
Through evaluation of surveys conducted by employees of Home Depot, it can be concluded that employees generally enjoy their employment with Home Depot. Of course, there are a few that have negative feelings towards the company, but overall, most really like working with Home Depot. Employees at store level reported that there was involvement between store level and corporate level. “Home Depot is an excellent employer with an open corporate culture with frequent interactions and visits with the vice presidents,” was stated by a store manager of one of the thousands of stores in Home Depot’s many locations (Vault.com, June 8, 2007). The corporate culture was described as relaxed and enjoyable and many stated that there job was an exciting experience. Some other felt that Home Depot was a “horrible place to work with management and HR that do not care,” (Vault.com, June 8, 2007). Many of the people that were surveyed reported working for the company for over two years and that there were many opportunities for advancement with the company.
Home Depot and Lowe’s both have separate corporate websites aside from their retail websites. The corporate websites both include a section for career opportunities. They both list all of the corporate jobs that are currently held at each company’s corporate headquarters. The listings include the duties and expectations of the job. These jobs may or may not currently have openings, but both companies are always welcoming new applicants.
Lowe’s offers a unique approach to finding new employees by having a college recruitment program. Lowe’s recruiters travel to universities all over the United States from January through April. They are looking for future employees who fit in with their current open positions and have a positive attitude towards the values that Lowe’s stands for.
When trying to contact Home Depot and Lowe’s about the hiring requirements for corporate positions, not much information could be gathered. No one at the Home Depot could be contacted regarding these requirements. When calling Lowe’s, the only information that could be gathered was that a Bachelor’s degree is not required, but is highly recommended, especially if wanting a higher salary. Experience in one’s desired work field is also highly recommended. All other information regarding hiring practices, such as detailed requirements, could not be disclosed for “competitive reasons”, according to the supervisor at the Lowe’s customer care center.
Lowe’s and Home Depot both take pride in being equal opportunity employers with diversity being a core goal of their desired culture. Both companies have realized that to succeed in today’s economy they must encourage diversity within all areas of business from their suppliers to the employees at the corporate offices and the retail stores. Lowe’s and Home Depot have both implemented many programs that encourage diversity and offer employment opportunities for minorities.
Lowe’s knows that to continue on the path of success, they must maintain and continue to grow the diverse environment they currently possess. As a result of this, their goal is to make all customers feel welcome and make sure all employees can succeed comfortably. They have also taken into consideration the preferences of the different communities they serve, so as to accommodate them more effectively. Lowe’s has embraced diversity in all forms within its employees and suppliers, and this quality is carried out through human resources, community outreach programs, and marketing.
Being an equal opportunity employer, Lowe’s does not discriminate on the basis of race, color, religion, gender, national origin, disability, sexual orientation or any other characteristics protected under applicable law. They have set up programs to specifically foster inclusion and equal employment opportunities such as their annual Gallup employee survey, employee publication (”Lowedown”), Open Door policy, Alertline telephone complaint-line, and various other training and development programs (Lowes.com, June 1,2007). Lowe’s employs over 2,700 managers who have participated in its diversity education and training workshops. These training programs have an emphasis on effectively managing diversity and inclusion (Lowes.com, June 1, 2007).
Within the current retail industry, Lowe’s has one of the strongest multi-cultural marketing initiatives. Through these creative plans and strategies, they hope to attract multi-cultural consumers to the stores with an enhanced in-store experience. Within its suppliers, Lowe’s seeks out business relationships with minority and female-owned business enterprises (MWBEs).
Home Depot places a great amount of focus on diversity within the company and uses this as its platform for success. They believe that diversity is the foundation of our culture and is something that should be embraced and celebrated. From this point of view and understanding comes a higher ability to serve the community. One of the goals Home Depot hopes to continue to develop includes recognizing each employee’s uniqueness, in hopes of encouraging them to reach their full potential.
Over the years, Home Depot has created many National Hiring Partnerships. “The Home Depot is committed to hiring a diverse workforce. As a sign of our commitment, we have partnered with national nonprofit and governmental agencies and educational organizations. These partnerships allow us to reach out to the communities in which we operate, and provide our company with a broad range of qualifies candidates with diverse backgrounds” (Homedepot.com, June 1, 2007).
Home Depot has started many initiatives to help maintain its level of diversification. Its first, Diversity Through Culture, was started in 2001, and its purpose is to encourage employees to share cultural experiences in the stores support centers. In hopes of educating all employees about different cultures and creating a more positive work environment, they provide a series of cultural events throughout the year (Homedepot.com, June 1, 2007).
The second initiative is the Home Depot Inclusion Council, which looks closely at how diversity affects the company within business issues. This council examines the current practices and processes of the company, and then shapes the policies and other initiatives (Homedepot.com, June 1, 2007).
Home Depot makes a point to create relationships with diversity organizations that also support diversity in the workplace or represent diverse communities and associations. They also create these same positive relationships with their suppliers, therefore creating a beneficial partnership.
Home Depot and Lowe’s Home Improvement both take the time and put their abilities to good use by getting involved in their communities. Disasters happen all the time and both are there to help whenever it is needed. With natural disasters happening at least once a month, both of these companies do a great job by lending a helping hand with Team Home Depot and Lowe’s Habitat for Humanity Women Build Program. Both companies are also part of The American Red Cross, where Lowe’s brings in support with volunteers, product donations, and much needed funds (Lowes.com, May 31, 2007). Home Depot partnered up for a three-year, $6.6 million initiative to educate one million people about disaster preparedness (Homedepot.com, May 31, 2007).
Lowe’s Toolbox for Education gives parents the power to make a change in the lives of students. Lowe’s launched a partnership with PTO Today which is a leading parent-teacher group organization. An award of $5,000 is given to public schools for improvements. Schools are able to apply through the website or by contacting the company. Lowe’s Charitable and Educational Foundation (LCEF) has a long and proud history of contributing to grassroots community projects. The primary philanthropic focus areas are kindergarten – 12 public schools and non-profit, community based organizations. Home Safety Council was founded by Lowe’s in 1993, and is a non-profit organization dedicated to helping prevent the nearly 21 million medical visits that occur on average each year from unintentional injuries at home. Lowe’s heroes are employee volunteers working with local non-profit organizations to improve their community. The Outdoor Classroom Grant Program, which is a part of LCEF and the National Geographic Explorer, a classroom magazine, both engage student’s in hands-on natural science experiences. These provide enrichment opportunities across the core curriculum. Skills USA is a national student organization that works directly with businesses and industries to provide relevant job training, plus education on the importance of leadership skills, positive attitudes, and pride in workmanship. This program, new for 2007, combined vendor support to award grants for innovative community service projects (Lowes.com, May 31, 2007).
The Home Depot Foundation is another way Home Depot is getting recognition. Established in 2002, they have been providing additional resources to nonprofit organizations throughout the United States and Canada to further building goals for the community. They want people to feel at home; a good way of doing so is by raising awareness of how to improve. This foundation awards grants three times per year to eligible groups that are nonprofit (Home depot.com, May 31, 2007). The Foundation has invested millions of dollars in communities across the country to help our neighbors of modest means live in homes they can afford to own and maintain in the long term. These homes provide safe, healthy environments and conserve energy, water and other natural resources. Twenty-five percent of our nation’s tree canopy is in our parks, along tree-lined city streets and in our own backyards. They believe that trees are an untapped resource that can be used to help cities deal with the pollution of our air and water, cool our city streets and homes, reduce crime, reduce asthma and improve our overall health. We Build CommUnity is an extensive community relations program that reaches out to communities where Home Depot associates live and work with philanthropic and volunteer support. They are also work along many of the rainforests around the world increasing awareness of sustainability and Eco Options which is dedicated to reducing negative environmental impacts everyday (Homedepot.com, May 31, 2007).
Conclusion and Recommendations
Through our extensive research of Lowe’s and Home Depot, we have concluded that Home Depot would be a better choice to build a future with.
1. World’s Largest Home Improvement Retailer
They are the world’s largest home improvement retailer which offers stability and job security. Also, being a multinational corporation is a huge benefit when looking for advancement opportunities and possible transfer options in the corporate world.
2. Benefits Package
After researching both companies benefit packages there was not much variation between the two. Home Depot had a great retirement plan that involves a 401K and employee stock purchase plan. The extensiveness of their benefits were also attractive. They go as far as offering tuition reimbursement to veterinary pet insurance. The complete coverage made us feel that the company cared about and valued their employees.
3. Community Involvement
Home Depot’s involvement within communities they are located is phenomenal considering the large amount of locations. The lives affected by their programs and foundations are numerous. They show compassion that most MNC’s do not.