In chapter 3, they discuss Home Depot and how its management style created problems amongst the organization. A former CEO of Home Depot fostered a hierarchy culture which stripped managers of their ability to efficiently manage. They saved money but the effects where damaging. The financial records where in decent shape but the culture deteriorated. The individual stores lacked the ability to modify their inventory to what was fitting to the climate. As a result, the stores where stocked with goods for the wrong season.
This example indicates the impact of management on the organization. Had the top executives respected the decisions of management, Home Depot would have been able to provide a better experience for their customers.