The Home Depot and Radio Shack
The Home Depot and Radio Shack have thus far survived the test of these economic times, perhaps in large part due to their strong organizational commitment from both employees and customers. The Home Depot has a broad consumer base with the do-it-yourself homeowners looking to save a few bucks (Datamonitor, p. 20). Radio Shack is considered to be one of the “nation’s most experienced and trusted consumer electronics specialty retailers” (Radio Shack, 2008). Much like Global Communications, both The Home Depot and Radio Shack have experienced recent threats to profitability as well as low employee morale and plummeting stock prices.
Despite shortfalls in revenues, The Home Depot has built a high level of organizational commitment (McShane & Glinow, 2005) by providing incentives, rewards and bonuses even through the tough times (Datamonitor, p. 20). Radio Shack also faced plummeting morale when it was discovered that the former Chief Executive Officer, David Edmondson had made many false claims on his resume (API, 2006). The company responded abruptly to the threat to this essential trust by replacing Edmondson and working on a long term plan to increase trust with its customers.
Global Communications shares some of the difficulties faced by The Home Depot and Radio Shack, yet has decided to outsource its jobs rather than build the organizational commitment of the existing employees. Despite financial pressure, The Home Depot continues to increase employee satisfaction by honoring top performers with bonuses (Kellogg, 2008). Clearly, they recognize the correlation between job satisfaction and performance as noted in recent studies (McShane & Glinow, 2005). Radio Shack also understood the psychological contract that customers experience when they purchase an item from a trusted vendor (McShane & Glinow, 2005). There is also evidence that organizational commitment...