PREVIEW CASE

The Home Depot's Extreme Communication Makeover

With over 1,800 "orange box" stores throughout North America and more than 350,000
employees, The Home Depot has become the world's largest home improvement retailer.
Although it's a landmark today, the company is relatively new-founded in 1978. To say that
its growth has been staggering is an understatement: The Home Depot is the fastest growing
retailer in history and the youngest retailer in the Fortune 50. Its sales volume is so enormous
that in 2005 alone, it sold enough carpet to pave a two-lane road from company headquarters
in Atlanta to Los Angeles, then up New York and back again to Atlanta. The company enjoys
annual sales of over $67 billion, it has 22 million customers per week, and it opens new store
every 50 hours.
As impressive as these figures are, The Home Depot's vast size, rapid growth, and geographic
diversity have created a number of challenges-not the least important of which are the
complexities of communication. After all, employees speak not only English, but Spanish (in
parts of the United States and in Mexico) as well as French (in Qubec) not to mention the
various mother tongues spoken by suppliers and immigrant employees. And of course, the
company faces the Herculean task of getting the word out to store employees about such vital
issues as price changes, promotional campaigns and product recalls. To make all this happen,
The Home Depot has developed a two-pronged plan that capitalizes on technology.
The challenge of communicating in multiple languages is so extensive that The Home Depot
has a translation supervisor, Juan Morales, who oversees the translation of everything from
the labeling of boxes and the creation of training manuals to in-store promotional campaigns.
To receive perfect translations very quickly, the company has partnered with a firm
specializing in international translation services. Bowne Global Solutions (BGS). They
installed a Web-based system through which Home Depot managers can submit translation
projects, ranging from simple in-store notices to lengthy operational manuals for rapid
translations that sound completely natural to native speakers. To date, BGS has completed
over 800 translation projects not only for Home Depot departments in the United States,
Canada and Mexico but also its numerous suppliers throughout the world. Mr. Morales has
noted that the quick turnaround and high-quality translations it gets from BGS have been
instrumental to The Home Depot's.
Another communication challenge at The Home Depot is the need to coordinate all the
information sent to sales associates and managers in a way that ensures that nothing is
missed-but without overwhelming them. Over the years, these have been problems for the
giant retailer, as messages in various forms would pour into stores daily, creating a deluge of
phone calls, faxes, snail mails, and e-mails. According to Shannon Roh, the director of store
operations, there was need to coordinate this ongoing stream of information. To streamline
and prioritize the information. The Home Depot again sought the expertise of an outside firm,
Reflexis Systems, which developed a Web-based system in which all messages are organized
in a single place. Now, not only can managers access all the information required to plan and
track their assignments, but they also can track their progress and report their results on a
real-time basis.
The biggest challenge in implementing the system, which was rolled out in September 2002,
involved training more than 13,000 employees in every store. Ms. Roh has been pleased with
the more streamlined and consistent flow of information that has resulted in the past few
years. Says she, "We've achieved a single pipeline for all managers to receive all action-
required communication and we've eliminated duplication in our communication," adding
that managers "no longer have to read the same e-mail three times because it was sent to them
by so many different people." Also important, the clarity and greater visibility of important
messages has made it possible for stores to be in perfect compliance with requirements for
handling product recalls and safety alert which benefits customers. And this, of course,
contributes to The Home Depot's effort to provide outstanding customer service.
There can be no mistaking the major role of communication in the success enjoyed by The
Home Depot in recent years. The company has experienced not only steady increases in
profitability, but also considerable recognition among its employees as a desirable place to
work. Without the company's success at coordinating massive amounts of information in
understandable forms. These benefits would be unlikely. The resulting confusion surely
would lead to frustration among employees and customers.
As you might imagine, although The Home Depot surely is special, it is far from alone when
it comes to emphasizing communication in its business plans. Indeed, communication is
considered a key ingredient in the recipe for business sucess by executive throughout the
world. Consider, for example, Ben Verwaayen, chief executive of British Telecom Group
(BT), who in 2005 won the World Communication Award for being the "Most Influential
Person". Given his extraordinary efforts to stay connected to his staff and customers, this is
not at all surprising. Mr. Verwaayen regularly maintains close relations with the company's
100.000 employees by traveling to its offices throughout the United Kingdom. And, as if this
is not enough, he has set up his own Web site from which he fields an average of 200 e-mails
a day from BT's employees. Although many factors contribute to business success indeed, BT
has enjoyed steady profit for many years industry analysts are convinced that the company's
chief executive's efforts to stay in touch with his employees is a key factor. After all, unless
the person at the helm and those who answer to this individual are all pulling in the same
direction, there is little reason to be optimistic about the success of business activities.
Both Home Depot and BT illustrate central role of communication as a factor enabling the
coordination of individuals within organizations. With this important function in mind, in this
chapter we will explain how the communication process works and how to foster
communication in organizations. This is important considering that managers spend as much
as 80 percent of their time engaging in some form of communication, such as peaking or
listening to others, or writing to and reading material from them.
Communication is an especially important contributor to the effective functioning of today's
organizations. There are several key reasons for this
Technology has sped up the pace of work. As work gets done faster, communication
must be more effective because there is less time to correct errors or
misunderstandings.
Work is more complex than ever before. People interact with lots of others,
requiring the careful coordination of information.
PICTURE
FIGURE 9.1
Technology has Transformed Communication, opening Up Work options.
Advances in communication technology have made it possible for countless men and women
to work full-time from their homes. Using the Internet and telephone, they are able to
transmit work and maintain regular contact with their colleagues. The practice of
telecommuting, popular today not only allows people to spend time with their children, but
also to save time and money by not having to commute to a distant office.
Employees are likely to be distributed geographically. It's not unusual for people to
work from home and to keep in close contact with their home office while traveling
on business. And, when people are out of sight, the normal opportunities to
communicate when seeing someone in person are eliminated
Knowledge and information are key to success. For today's organizations to be
successful, they not only must produce goods, but they also must stay abreast of
rapidly changing markets. This requires information to be accessed and shared in a
coordinated fashion.
Technology has transformed the way people do their jobs. In today's electronically
sophisticated world, we count on a wide variety of communication media that have
transformed the way people do their jobs (see Figure 9.1)
Given the vital role in organizations. We will examine this process of closely in this chapter.
To begin, we will define the process of communication and characterize its role in
organizations. Following this, we will describe the two basic forms of communication: verbal
and nonverbal. Because much of today's communication is high tech in nature, we computer-
mediated communication techniques. Next, we will distinguish between two major types of
communication in which we all engage-formal communication and informal communication.
Then, recognizing that people don't always communicate in the same fashion, we will
examine two key individual differences with respect to communication sex differences and
cross-cultural differences. Finally, we will conclude this chapter by offering a series of
concrete suggestions regarding how you can become a better communicator.
Communication: Its Basic Nature.
For you to appreciate fully the process of organizational communication, we need address
some fundamental issues. To begin, we will formally define what we mean by
communication and then elaborate on the process by which it occurs. Following this, we will
describe the various purposes and levels of communication in organizations.
Defining Communication and Describing the Process
What do the following situations have common? The district manager posts a notice stating
that smoking is prohibited on company property. An executive prepares a report about the
financial status of a potential corporate takeover prospect, a taxi dispatcher directs Cab 54 to
pick up a fare at 1177 Regency Drive. A foreman smiles at one of his subordinates and pats
him on the back in recognition of a job well done. The answer, if you haven't already guessed
it, is that each of these incidents involves some form of communication. Although you
probably already have a good idea of what communication entails, we can better understand
in organizations by defining it precisely and describing the nature the communication process
With this in mind, we define communication as the process by which a person, group, or
organization (the sender) transmits some type of information (the message) to another person,
group, or organization (the receiver). To clarify this definition and to further elaborate on how
the process works, we have summarized it in Figure 9.2. You may find it helpful to follow
along with this diagram as we review the various steps.
Encoding. The communication process begins when one party has an idea that it wishes to
transmit to another (either party may be an individual, a group, or an entire organization). It is
the sender's mission to transform the idea into a form that can be sent to and understood by
the receiver. This is what happens in the process of encoding translating an idea into a form,
such as written or spoken language, that can be recognized by receiver. We encode
information when we select the words we use to write a letter or speak to someone in person.
This process is critical if we are to clearly communicate our ideas. If you've ever had
difficulty finding the right words to express your ideas (and who hasn't!), then you know that
people are far from perfect when it comes to encoding their ideas. Fortunately, as we will
note later, this skill can be improved.
Channels of communication. After a message is encoded, it is ready to be transmitted over
one or more channels of communication to reach the desired receiver-that is, the pathways
along which information travels. Telephone lines, radio and television signals, fiber-optic
cables, mail routes, and even the air waves that carry the vibrations of our voices all represent
potential channels of communication. Of course, the form of encoding largely determines the
way information may be transmitted. Visual inf ormation- such as pictures and written words
may be mailed, delivered in person by a courier, shipped by an express delivery service, or
sent electronically, such as via e-mail, uploaded onto a Web site, or faxed, oral information
may be transmitted over the telephone, via radio and television signals-and, of course, the
old-fashioned way, in person. Whatever channel is used, the goal is the same: to send the
encoded message accurately to a desired receiver
Decoding. Once a massage is received, the recipient must begin the process of decoding-
converting the message into the sender's original ideas. This involves many different
subprocesses, such as comprehending spoken and written words, interpreting facial
expressions, and the like. To the extent that the sender's message is decoded accurately by
receiver, the ideas understood will be the ones intended, of course, our ability to comprehend
and interpret information received from others may be imperfect. For example, this may be
restricted by unclear messages, by our own language skills, or by one's existing knowledge
(see Figure 9.3). This, as in the case of encoding, limitations in our ability to decode
information represent another potential weakness in the communication process-but, as we
will describe later in this chapter, one that can be developed.
Finally, once a message has been decoded, the process can continue, with the receiver
transmitting a new message back to the original sender. This part of the process is known as
feedback-knowledge about the impact of messages on receivers. Receiving feedback allows
senders to determine whether their messages have been understood properly. At the same
time, giving feedback can help convince receivers that the sender really cares about what he
or she has to say. Once received, feedback can trigger another idea from the sender, and
another cycle of transferring information may begin. For this reason, we have characterized
the process of communication summarized in Figure 9.2 as continuous.
PICTURE
FIGURE 9.2
The Communication Process. Communication generally follows the steps outlined here.
Senders encode messages and transmit them via one or more communication channels to
receivers, who then decode them. The process continues as the original receiver sends
feedback to the original sender. Factors distorting or limiting the flow of information, known
as noise, may enter into the process at any point.

PICTURE
FIGURE 9.3
Decoding: A Challenging Process
Although the police officer appears to be encoding the directions very clearly, the man to
whom he is speaking does not appear to be getting the message. In other words, he is not
decoding the message well. This might occur because the man is so unfamiliar with the
neighborhood that he cannot accurately figure out exactly what the police officer means.
Such problems occur widely in organizations, leading to obvious problems.
Noise. Despite the apparent simplicity of the communication process, it rarely operates
flawlessly as we have described it here. As we will see, there are many potential barriers to
effective communication. The name given to factors that distort the clarity of a message is
noise. As we have shown in Figure 9.2, noise can occur at any point along to the
communication process. For example, messages that are poorly encoded (e.g., written in an
unclear way) or poorly decoded (e.g., not comprehended), or channels of communication that
are too full of static (e receivers' attentions are diverted from the message) may reduce
communication's effectiveness.
One particularly annoying source of noise in e-mail communication these days is spam,
unsolicited commercial bulk e-mail messages (see figure 9.4). The statistics are shocking:
Approximately 206 billion junk e-mailings were estimated to have in 2006 (1,400 per
consumer), doubling from 2005.
The annual cost of spam to U.S. corporations is $8.9 billion $2.5 billion for European
businesses.
Approximately 80 percent of e-mail messages received are considered spam, and
despite efforts to stop it, the figure is rising rapidly.
Given these figures, it's not surprising that spam, a modern form of noise, contributes greatly
to the inefficiency of e-mail system-bogging them down with unwanted information, making
it difficult to search for desired messages, and often exposing people to distasteful material.
Not only spam, but a variety of factors (e.g., e pressure, organizational politics) contribute to
the distortion of information transmitted from one party to another and to the resulting
complexity of the communication process. As you continue reading this chapter you will
come to appreciate many of the factors that make the process of organizational
communication so very complex and important.

Purposes and Levels of organizational Communication.

In a sense, discussing the of communication organizations seems unnecessary since it's so
obvious: You have to communicate with others to share information with them, which is
necessary to get things done. This true of course, but communication actually serves a much
broader range of purposes. In fact, communication serves at least eight critical functions in
organizations. These are as follows:
Directing action. Communication between people is necessary to get others to
behave in a desired fashion. Managers must communicate with subordinates to tell
them what to do, to give them feedback on their performance, to discuss problems
with them, to encourage them, and so on.
Linking and coordination. For organizations to function effectively, individuals and
groups must carefully coordinate their efforts and activities, and communication
makes this possible. In a restaurant, for example, a waiter must take customers orders
and pass them along to the chef.
Building relationships. Communication is essential to the development of
interpersonal relationships. Building friendships promoting trust (see Chapter 11)
requires careful communication. Doing so help create a pleasant atmosphere in the
workplace.
Explaining culture. By communicating with others, employees come to understand
how their companies operate, what is valued, and what matters most to people. In
other words, they learn about the culture of their organizations (we will discuss
organizational culture in detail in Chapter 14).
Interorganizational linking. People communicate not only with others in their own
organizations but also with representatives of other organizations. This makes it
possible for companies to work together to coordinate their efforts toward achieving
mutual goals, such as occurs in joint ventures (see Chapter 15).
Presenting an organization's image. Organizations send messages about themselves
to broad groups of others. For example, companies publish information about goods
and services to attract prospective customers. These forms of communication are
designed to present certain images of the organization to the world
Generating ideas. Communication is used to generate ideas and to share them as
necessary. When people brainstorm with one another, for example, the
communication process helps create new ideas (see Chapter 10 for a discussion of the
brainstorming process)
Promoting ideals and values. Many organizations "stand for something" and have
purposes that must be communicated clearly. For example, a stated purpose of the
National Organization for Women (Now) is to help women participate fully in society.
Communication is required for this mission to be understood- and accomplished.
As these descriptions suggest, communication not only plays a vital role in organizations, but
it also occurs at various levels. Specifically, organizational communication occurs at the five
distinct levels summarized in Table 9. These range from interpersonal communication at one
end, involving people on an individual basis, all the way to mass communication, in which
information is shared with large numbers of people. This broad range of approaches lends
itself to study by different professional groups. Indeed, special ists in the field of OB are not
the only professionals interested in organizational communication. This topic also is of
interest to many social scientists, such as psychologists and sociologists, as well as people in
other fields. Notably advertising and journalism. Among OB specialists, the focus primarily
is on the three lowest levels, interpersonal communication, group-level communication, and
organizational-level communication. You will see these various emphases in these chapter.
Now that we have established the nature of communication in organizations. We will
continue by examining the two major forms it takes-verbal communication (communicating
by using words) and nonverbal communication (communicating without words).
Verbal and Nonverbal Communication: Messages with and Without Words. Because you
are reading this book. We know you are familiar with verbal communication the process of
using words to transmit and receive ideas. Whether it's a face-to-face chat with a coworker. A
phone call from a supplier. An e-mail message from the boss or a faxed memo from company
headquarters. People in today's organizations use a variety of different communications
media. When we speak of verbal media, we are referring to communication involving the use
of words. These may be transmitted either orally or in written form, and both play an
important role in organizations.
Also, as you know, much of what people communicate occurs without using words. Which is
known as nonverbal communication. Whether we're talking about people's facial
expressions or body language (to which we referred in Chapter 3), or other subtle cues that
we will describe here, nonverbal communication carries a great deal of weight when it comes
to sending messages in organizations. In this section of the chapter we discuss both verbal
and nonverbal communication.
Verbal Media
When most of us think communication, we think of verbal media forms of communication
involving the use of words. Face-to-face conversations, letters, and telephone conversations
are clear examples. The various forms of verbal media can be distinguished with respect to
their capacity to convey information.
Some verbal media, such as face-to-face conversations, are considered especially rich. Not
only do they provide vast amounts of information, but they also are highly personal in nature
and provide opportunities for immediate feedback. A bit less rich are non-face-to face
interactive media, such as the telephone. However, not all business communication requires a
two-way flow of information. For example, further toward the lean end of the continuum are
personal, but static media, such as memos (written messages used for communication within
an organization) and letters (written messages used for external communication). This
includes one-way communications sent either physically (letter) or electronically (fax or e-
mail). (Given their growing importance in today's organizations, we will describe high-tech
form of communication in more detail in the next section) Finally, at the leanest end of the
continuum are highly impersonal, static media, such as flyers and bulletins, written
information that is targeted broadly and not aimed at any one specific individual. For an
overview of this continuum of verbal media, see the horizontal arrow at the top of Figure 9.5
Two types of written media deserve special mention because of the important role they play
in organizations-newsletters and employee handbooks. Although they are impersonal and
aimed at a general audience, newsletters serve important functions in organizations.

PICTURE
FIGURE 9.5
Media Richness Theory
Verbal communication media may be characterized along a continuum ranging from highly
rich interactive media, such as face-to-face discussions, to lean, static media, such as
bulletins. According to media richness theory, lean media are most effectively used to
communicate routine/clear messages, whereas rich media are most effectively used to
communicate nonroutine/ambiguous messages.
Newsletters are regularly published internal documents describing information of interest to
employees regarding an array of business and nonbusiness issues affecting them.
Approximately one-third of companies rely on newsletters, typically as a means of
supplementing other means of communicating important information, such as group
meetings. Traditionally, newsletters were printed and distributed to employees, but these days
many are distributed electronically. Not only are online newsletters far less expensive to
create but they also allow information to be updated far more rapidly, making them current
and useful to everyone
Another important internal publication used in organizations is the employee handbook a
document describing to employees basic information about the company. It is a general
reference regarding the company's background, the nature of its business, and its rules.
Specifically, the major purposes of employee handbooks are: (1) to explain key aspects of the
company's policies. (2) to clarify the expectations of the company and employee toward each
other, and (3) to express the company's philosophy. Handbooks are more popular today than
ever before. This is not only because clarifying company policies may prevent lawsuits, but
also because corporate officials are recognizing that explicit statements about what their
company stands for are a useful means of effectively socializing new employees and
promoting the company's values.
Matching the Medium to the Message
What types of communication are most effective under various circumstances? In general
communication is most effective when it uses multiple channels, such as both oral and written
messages. Apparently, oral messages are useful in getting people's immediate attention, and
the follow-up written portion helps make the message more permanent, something that can be
referred to in the future. Oral messages also have the benefit of allowing for immediate two-
way communication between parties, whereas written communiqus frequently are only one-
way, or require too long for a response
Not surprisingly, two-way communications (e.g., face-to-face discussions. telephone
conversations) are more commonly used in organizations than one-way communications
(e.g., memos). For example, in a study of civilian employees of a U.S. Navy agency
approximately 83 percent of the communications taking place used two-way media. In fact.
55 percent of all communications were individual face-to-face interactions. One-way, written
communications tended to be reserved for more formal, official messages that needed to be
referred to in the future at the receiver's convenience (e.g., official announce ments about
position openings). Clearly, both written and spoken communications have their place in
organizational communication. The trick to any communication medium is not only when to
use it but how to use it wisely. For some valuable suggestions in this regard, see Table 9.2.
In essence, a medium's effectiveness depends on how appropriate it is for the kind of message
being sent. Specifically, according to a conceptualization known as media richness theory, the
effectiveness of any verbal medium depends on the extent to which it is appropriate in view
of the ambiguity of the message being sent. In particular, oral media (e.g., telephone
conversations, face-to-face meetings) are more effective than written media (e.g., notes,
memos) when messages are nonroutine or ambiguous. This is because the information
contained in such messages is likely to be unclear to recipients, requiring the additional
assistance in interpretation that oral media provide. If you've ever found yourself giving up
on e-mail and calling someone to discuss something that is too complex, then you know what
we mean.
By contrast, written media are more effective when messages are clear. For example, using e-
mail to send someone a billing address or a phone number or directions to a company
location all very clear and highly specific information is more effective because it avoids
errors. Problems of mishearing a number, for example, are eliminated, and people easily can
refer to the written message when the information it contains is called for. In view of this, the
quest for effective communication should be seen not simply as a question of what
communication medium is best, but rather, what medium is best suited to the particular
message being sent (recall the summary in Figure 9.5).
lmportantly, managers who follow these practices by matching the type of communications
media they use to the kind of message they are sending, considered media- sensitive,
generally perform their jobs more effectively than those who do not do so, considered media-
insensitive. Fortunately, many of us are likely to have a good intuitive sense for selecting the
appropriate medium for the messages we wish to send. If you've ever found yourself thinking
that it's best to discuss some "sensitive" or "delicate" matters in person instead of via e-mail
or phone, then you know what we mean. Matters that are "difficult" because they are
emotionally charged-those pertaining to serious illness or job termination, for example are
best handled in person instead of in writing because of the added opportunities they offer to
demonstrate sensitivity and concern. Also, in terms of media richness theory, they are
nonroutine and sufficiently ambiguous in nature to require face-to-face explanations.
However, not all managers demonstrate this sensitivity. As an extreme example,
administrators in one California school district not only informed teachers that they were
being laid off by giving them curt written notices, but delivered them to the teachers while
standing in front of their classes. The resulting embarrassment for all is easy to envision.
Clearly, these individuals would have been well served to learn a bit about media richness
theory (not very day politeness).
Nonverbal Communication
It has been estimated that people communicate at least as much nonverbally (i.e., without
words) as they do verbally. Indeed, there can be no doubt that many of the messages we send
others are transmitted without words. Here are just a few examples of how we communicate
nonverbally in organization
Mode of dress. Much of what we say about ourselves to others comes from the way
we dress. For example, despite the general trend toward casual clothing in the
workplace, higher-status people tend to dress more formally than lower-ranking
employees.
Waiting time. Higher-status people. such as managers and executives at all ranks tend
to communicate their organizational positions nonverbally by keeping ranking people
waiting to see them a gesture that sends the message that one's time is more
important.
Seating position. Higher-ranking people also assert their higher status by sitting at
the heads of rectangular tables, a position that not only has become associated with
importance over the years, but that also enables important people to maintain eye
contact with those over whom they are responsible.
Body language. When communicating in other countries, it's useful to learn not only
the verbal language spoken, but also the nonverbal, body language used. People from
various cultures interpret various verbal signs very differently than people do in the
United States. Avoiding serious miscommunications requires familiarizing one-self
with such information (see figure 9.6)
As you read this, you may be asking yourself. "What can I do to present myself more you
favorably to those around me on the job?" Specifically. What can you do nonverbally to
cultivate the impression that you have the qualities of a good leader, and that you are
worthy of promotion? Just as you can say certain things to enhance your image as a
strong, effective employee, there also are several things you can do nonverbally that will
enhance your Image. For a summary of these. See Table 9.3