Organizational Composition of Proctor and Gamble

Procter & Gamble

The company I've chosen for the task of controlling change in company is Procter & Gamble. The company is a Fortune 500 North american multinational firm headquartered in Downtown Cincinnati, Ohio that manufactures a variety of consumer goods. It is 6th in Fortune's Most Respected Companies 2010 list. P&G is credited numerous business improvements including brand management and the soap opera.

History and Background of Company

In 1887 P&G institutes a pioneering profit-sharing program that provides employees an ownership stake in the Company. This significant invention helps employees hook up their vital jobs with the Company's success.

In 1924 P&G becomes the first company to perform deliberate, data-based market research with consumers. This forward-thinking procedure enables us to boost consumer understanding, anticipate consumer needs and reply with products that improve their everyday routine.

In 1994 P&G becomes main companies to officially respond to consumer correspondence by creating the Consumer Relationships department. The addition of toll-free phone numbers in 1973 and e-mail in the 1980s further boost consumers' ability to get hold of us and keep the consumer at the heart of all we do.

In 1995 Crest is co developed with Indiana University or college. This collaboration provides a product that is a breakthrough in the utilization of fluoride to protect against teeth decay, the second-most widespread disease at the time.

In 2002 P&G evolves Naturella feminine pads specifically to meet up with the needs of low-income ladies in Latin America. Predicated on deep consumer understanding, Naturella responds to consumers' desire to have freshness with chamomile, a distinctive ingredient never before used in feminine maintenance systems.

In 2005 High Frequency Stores common in producing market segments emerge as our greatest customer channel. Consisting of practically 20 million stores around the world, HFS represents a particular opportunity in fast-growing, low-income marketplaces. Through HFS, we hook up to consumers with affordable products and packaging specially created for their needs.

Investigation Organizational Composition of Procter & Gamble

General meaning of Organization structure:

Organizational structure specifies the firm's formal reporting interactions, procedures, control buttons, and power and decision-making operations. Producing an organizational structure that effectively helps the firm's strategy is difficult, especially because of the uncertainty (or unstable variance) about cause-effect interactions in the global economy's swiftly changing and dynamic competitive environments. When a structure's elements (e. g. , reporting relationships, procedures, etc) are properly aligned with each other, that structure helps effective execution of the firm's strategies. Thus, organizational framework is a critical element of effective strategy implementation processes

Types of organizational structure

Simple Structure

The simple framework is a structure where the owner-manager makes all major decisions and monitors all activities as the staff provides as an expansion of the manager's supervisory specialist.

Functional Structure

The functional structure is a composition consisting of a chief executive officer and a restricted corporate personnel, with functional lines managers in dominant organizational areas, such as creation, accounting, marketing, R&D, anatomist, and human resources.

Multidivisional structure

The multidivisional (M-form) structure consists of operating divisions, each representing a separate business or income center in which the top corporate officer delegates obligations for day-to-day functions and business-unit strategy to division professionals.

Procter & Gamble

The composition of the Procter and Gamble is multidivisional structure. Because the simple structure is utilized in a small organization where in fact the owner works as a administrator and take all the top decision for the business. Typically, the owner-manager positively works available on a daily basis. Informal romantic relationships, few guidelines, limited activity specialization, and unsophisticated information systems explain the simple framework. Consistent and informal communications between the owner-manager and employees make it relatively easy to coordinate the work that is to be done. Functional structure is utilized for the business which is growing but relatively small group. This structure permits functional specialization, in that way facilitating active showing of knowledge within each functional area. Knowledge showing facilitates career paths as well as the professional development of efficient specialists. However, an operating orientation can have a poor effect on communication and coordination among those representing different organizational functions. Because of this, the CEO must work hard to validate that the decisions and activities of individual business functions promote the entire firm rather than solo function.

Procter & gamble is a comparatively big company with a small business spread internationally so they are using multidivisional composition. The multidivisional structure of P&G consists of working divisions, each rep-resenting another business or profit center in which the top corporate official delegates responsibilities for day-to-day procedures and business-unit strategy to division managers. Each division presents a definite, self-contained business with its own practical hierarchy. As initially designed, the M-form was thought to have three major benefits: (1) it enabled corporate and business officers to more accurately monitor the performance of each business, which simplified the condition of control (2) it facilitated comparisons between divisions, which upgraded the tool allocation process; and (3) it stimulated managers of badly performing divisions to consider ways of improving performance. Productive monitoring of performance through the M-form increases the likelihood that decisions made by managers heading specific units will be in shareholders' best interests.

Brands and Products


Beauty and Grooming


Some of the most famous products of beauty and Grooming brands are as under


Dolce & Gabbana



Health and Well-Being

Some of the most famous products of Health insurance and Well-Being brand are as under




Household Care

Some of the most famous products of Household Treatment brand are as under




Background to Change

In January 1999, Jager, a P&G veteran became the new CEO taking charge at a time when P&G was amid a commercial restructuring exercise that started in September 1998.

Jager encountered the challenging activity of revamping P&G's businesses and marketing routines. Soon after overtaking as the CEO, Jager told analysts that he'd overhaul product development, screening and launch techniques. The largest obstacle for Jager was P&G's culture. Jager realized the necessity to change the mindset of the P&G employees who was simply used to life span occupation and a conservative management style. On July 1, 1999, P&G officially launched the business 2005 program. It was an application of six-year length, where, P&G designed to retrench 15, 000 employees internationally. The expense of the program was predicted to be $1. 9 billion and it was likely to generate an gross annual savings (after taxes deductions) of around $900 million per annum by 2004.

Change in Group Structure

Till 1998, P&G had been structured along geographic lines with an increase of than 100 earnings centers. Under Corporation 2005 program, P&G sought to reorganize its organizational framework from four geographically-based business units to five product-based global sections - Baby, Feminine & Family Health care, Beauty Care, Fabric & Home Treatment, Food & Beverages, and Health Care.

Internal Change

The change the P&G heading to make internally is starting home based business product in the organizational framework. This change probably effects the whole group. Since it must share the organization resources financial as well as recruiting.

External change

Environment is changing quickly so the company also needs to be a dynamic to cater the environment change. P&G is the top company so its home based business unit definitely results the surroundings and creates a new market.

The Mistakes Committed

The Company 2005 program experienced several problems immediately after its launch. Analysts were quick to comment that Jager devoted a few mistakes which turned out costly for P&G. For example, Jager acquired made initiatives in January 2000 to obtain Warner-Lambert and American Home Products. Unlike P&G's cautious methodology towards acquisitions in the 1990s, this dual acquisition could have been the largest ever before in P&G's history, worthwhile $140 billion.

However, the stock market greeted the news of the merger negotiations by selling P&G's shares, which prompted Jager to leave the deal.

Implementing Ways of Revive P&G

In June 2000, Alan George Lafley (Lafley), a 23-year P&G veteran popularly known as 'AG, ' got over as the new President and CEO of P&G. The major difference between Lafley and Jager was their 'style of operating. ' Immediately after becoming CEO, Lafley rebuilt the management team and made efforts to improve P&G's operations and success. Lafley transferred more than half of P&G's 30 mature most officers, an unprecedented move around in P&G's history.

Building Diversity in the Organization

At P&G, we have confidence in taking benefit of all the initial and special distinctions that our employees possess and leveraging them to the fullest. Since variety is a company strategy for P&G, our initiatives are centered on bringing in folks from different ethnic and social backgrounds with incredibly diverse lives and job experiences.

Organizations that are in touch are more with the capacity of understanding consumers from all walks of life. They are far more capable of understanding, appreciating and leveraging their own variety. These are more capable of tapping the variety of outside associates.

Our recruiting initiatives target universities around Pakistan and are targeted at bringing in people with different leadership and considering styles. Today, our company attracts from more than 30 institutions and colleges.

We also give attention to gender diversity by focusing on women at colleges for females and retaining diversity lessons for female students on campuses. Women give you a different perspective that is essential to our success. We aim to balance not only organizational diversity but also variety within the various departments. Women constitute about 25 percent of the labor force at P&G Pakistan.

To stress this goal to your employees, P&G Pakistan has created many initiatives. To avoid defining our diversity aims too narrowly and limiting them to percentages and representations of certain categories, P&G has made remarkable recruiting initiatives and has launched programs such as versatile work arrangements and the day-care middle.

Diversity is reputed and required across all degrees of the company. Actually, diversity action plans are developed in each region of the world to give local diversity strategies the best potential for success.

Change Management Model: Dealing With Change

1. Denial

The first respond to a substantial change is often distress, - an over-all refusal to discover the information. In this manner we protect ourselves from being confused. Common responses include
  • Denying: "This can not be happening. "
  • Ignoring: "Hold out till it blows over. "
  • Minimizing: "It just requires a few minor changes. "

It can be done to continue working in the denial period, but eventually the impact visits home and an individual response is required.

Management Methodology OF P&G

Be up front with information to individuals and groups of staff. Tell them that change is going to occur. Recognize their doubts of change as reputable. Explain what things to expect and suggest actions they may take to adapt to the change. Provide them with time and energy to let things sink in, and then have a planning period to talk things through.

2. Resistance

In this period things often appear to get worse. Personal problems levels rise. It's quite common to invest time looking for someone or something to blame, or to spend some time complaining about the new set-up. Resistance is about concern with change. People could become physically sick, feel a variety of physical, psychological, and/or mental symptoms. Some people may mistrust their potential to survive the change. During this phase there is a greater concentrate on mourning the past, more than preparing for the near future. Many people want to avoid the situation or pretend it is not going on, sometimes by moving back to denial. The self-acknowledgement of thoughts being experienced, will ready visitors to move quicker to another phase.

Management Methodology of P&G

Listen, acknowledge thoughts, respond empathetically, encourage support. Don't try to discuss people out of their feelings, or tell them to improve or pull collectively. If you allow their response, they will continue steadily to feel they are able to tell you the way they are sensing. This can help you respond to a few of their concerns. Use questions to stimulate broader thinking and perspective environment.

3. Exploration

After an interval of have difficulties, individuals and organizations usually emerge from their negativity, breathe a sigh of relief, and change into a more positive, hopeful, future-focused period. People realize they will make it through OK. It could be as understated as just sense better, or as obvious as sleeping through the night for the very first time because the change started. The timing is different for every single person.

New directions do not emerge all at one time. Rather, what emerges first is the energy to put a search into action. People get started to find and explore new ways, to start clarifying goals, evaluating resources, exploring alternatives, and tinkering with new possibilities. A determination to 'swing into action' occurs without attempting first to get the "right way". It's important to resist doing the exploration stage too early by agreeing to something less than what the individual is capable of. This is a period of high energy, with creativeness at its top.

Management Methodology of P&G

Focus on priorities and provide any needed training. Follow-up on assignments underway. Placed short-term goals. Do brainstorming, visioning and planning sessions. Foster all learning opportunities to help beat concern with change.

4. Commitment

Finally, the individual has broken through the problems, discovered new means of doing things and/or adapted to the new situation. The commitment phase commences with give attention to a new course of action. This could be new ways of doing the job, or finding a fresh job. The successful dedication to a new course of action shows there's been learning development and adaptation for the average person.

Management Methodology of P&G

Set long-term goals. Focus on teambuilding. Generate a mission declaration. Validate and reward those giving an answer to the change. Look ahead.

Strategies pursuing by the Procter and Gamble

Strategy 1

Delight the buyer with sustainable improvements that increase the environmental profile in our products.

Strategy 2

Improve environmentally friendly account of P&G's own functions.

Strategy 3

Improve children's lives through P&G's communal responsibility programs.

Strategy 4

Engage and equip all P&G employees to build sustainability thinking and methods into their everyday work.

Strategy 5

Shape the near future by working transparently with this stakeholders to permit continued flexibility to innovate in a accountable way.

Resistance and its own Handling y P&G

Strong resistance to change is often rooted in deeply conditioned or historically reinforced emotions. Patience and tolerance are required to help people in these circumstances to see things differently. Bit by bit. There are types of this sort of progressive staged change all around the living world.

P&G the Psychological Contract is a substantial facet of change, and will be offering helpful models and diagrams in understanding and taking care of change - possibly at an extremely important level.

Also, certain types of people - the reliable/reliable/steady/habitual/process-oriented types - often find change very unsettling.

People who welcome change are not generally the best at having the ability to work reliably, dependably and follow procedures. The reliability/dependability features are directly other identity traits to ability to move/adaptability capacities.

Certain industries and disciplines have a higher concentration of personnel who desire a strong dependability/dependability personality profile, for example, health services and medical, administration, general population sector and federal departments, utilities and services; these areas will tend to have many staff with character profiles who find change difficult.

Age is another factor. Erik Erikson's attractive Psychosocial Theory is effective for knowing that people's priorities and motivations are different depending on the stage of life.

The more you understand people's needs, the better you'll be able to control change.

Be mindful of people's advantages and weaknesses. Not everyone welcomes change. Take time to understand the people you are coping with, and exactly how and just why they feel like they certainly, before you take action.

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