Management People and Organization - Case Study Example

Name: Lecturer: Course name: Course code: Date: Strategic Analysis of Proctor and Gamble (P&G) History of Proctor and Gamble (P&G) Proctor and Gamble have a rich history having been established more than 170 years ago by William Proctor and James Gamble in Ohio, USA. The initial business majored on the candle and soap production from fat left over’s of swine. In a span of 20 years after inception the company was ranked high in Cincinnati as its sales turn over where over $ 1 million. Today, Proctor and Gamble is leading in the manufacture and distribution of Fast Moving Consumer Goods (FMCG). At the strategic level, the company president has given a robust visionary and strategic plan to develop profitability, organizational culture and employee management. Worldwide the company is taking the lead in the manufacture of consumer products (Kathie Cooper). Tide, Pringles, Fusion, Gillette, Gahanna and Dolce are some of the P&G brands. The company has outlet in 80 countries of the word. It has over 300 brands which are marketed in more than 160 countries. Proctor and Gamble have been the leader worldwide in the manufacture, marketing and distribution of some superior fabrics and some home care, snacks and many more products. Its product has touched the lives of many people around the globe. The company’s slogan is on touching lives and improving life. In 2011, , the company's total revenue stood at US$ 82.56 billion while its net income stood at US$ 11.797. Globally it has employee workforce of more than 127,000, and a larger population of loyal customers. Strategic development Worldwide P&G is the giant provider of packaged consumer goods. Its foundation dates back to 100 years ago and it have embraced a stagey of acquisition and technical innovation to consolidate its wide list of brands in the global market. Currently it has reached over 180 Nations with diversified groups of product from batteries to laundry detergent. The company pride of 25 brands which are able to generate revenue of $ 1 billion or more. The strategic development of P&G can further be explained through a sword analysis; sword analysis has kept the company high always. This has been its tool of analyzing it strength, weakness, threats and potential opportunities. A SWOT analysis normally aid in gaining an insight of the company’s future, and it also assist in weighting between goals and objective to venture into in the business industry. Strengths 1. It has a strong collection of worldwide known brands 2. Financial muscle and strength to acquire and be able to invest on the long-term corporate changes.( It has a strong asset base) 3. Global distribution network and channels 4. Outstanding and historical success on R&D 5. Its product is perceived to be non-cyclical for example toothpaste and hence they have to be consumed irrespective of the economic situation. 6. Its sales growth has been stable and predictable, and it is targeted to be high diversifications Weakness 1. Dependence on a collection of specific brands for a material share of the company first line 2. Tough competition in all the sectors it has ventured into 3. Its products are almost found in each Conner of the world, and as such there’s not much room left for expansion rather than reliance on the growing population. Opportunities 1. It is possible for the company to acquire other brands from other companies and this may fuel further growth. 2. There is a chance of driving competitors out through advertisement. 3. There is a potential increase in market share as a result of emerging and growing market such as India and China (growing of middle class economies) Threats 1. Stiff competition from other players in the industry like Kimberly Clark and Johnson 2. Most of the economies are unstable 3. Continuous increase in the cost of raw materials 4. Consumers in new market economies are highly price sensitive 5. Entry of new products into the market (substitute commodities) From the above sword analysis, it is clear that P&G has a extremely strong financial base both local markets and at the external market (foreign market). It is therefore one of the most linked company in US. P&G has previously had excellent capabilities and abilities in moving forward innovations and has been in a position to commercialize them in a speedily way than most of its competitors in the sector. Despite this strength, the company faces stiff competition from Johnson and Jonson, Unilever alongside Kimberly Clark. Proctor and Gamble pride of an efficient and effective production processes which are focused on quality product. This system ensures proper inventory controls and as such saves the organization a lot of cost (David). Because of this efficient process of production the company consumers are therefore getting the same product cheaply since they are produced at a relatively lower cost than other organization. This has ensured that P&G consumers are in a position to get quality product at a relatively cheaper cost. The other key strength of P&G is its unique characteristic of having a large number of skilled workforces. The company has over 9000 R&D associated which constitutes 1,100 PhDs. This fact can justify why the organization has always remained successful. Because of the many skilled workforces the organization has been able to maintain the lead in production innovation for product exceeding 40, and it has over 2700 patent rights. The other prominent strength of the company is its track ability to produce high quality products which are never achieved in other companies. Consumers all over have preferences for high quality products with a reasonably cheaper price. This has been maintained well by the P&G which is always touted the Farther of consumer products. The company has been highly innovative and instrumental in coming up with products which are able to meet customers need for example in the field of dental hygiene Weakness The only challenge or weakness facing P&G is the lack of effective distribution system in a number of portions remote locations in some foreign countries alongside the high cost of investment capital and input factor. The other vital weakness lies of foreign employment or workforce, and this arose from lack of foreign experience among some managers who lacked experience on international business. This has hindered major operations with the headquarters Opportunities The company has the following opportunities a technology of production which gives emphasis to time, a well specified market share, removal of trade barriers or bureaucracies. The removal of trade barriers in some foreign countries ensured that the company was able to perform its functions in a more competitive manner without any interference from the governments of the foreign countries (Smith). Historically trade barriers or blockades were identified as the most influential threats for international business because of integrity issues such as corruptions and long period of clearance at point of entry. Threats The major threats span from a wide range of issue and the major threats are; the emergence of other substitute products into the market and this has greatly influenced consumers taste and preferences. Again several companies have entered the market and this has created stiff competition to P&G, high incidences of product blockades at some developing economies, stringent business laws and political instability in some countries. All these creates environment which are not favorable for transacting business and as such most investors fear the security aspect and the level of returns from their investment in such kind of an environment, since there is a high level of uncertainty. The role of leadership in Proctor and Gamble P&G Slogan is touching people. But leaders in P&G have a role of improving the lives of people and this form part of their purpose in life. Most leaders in P&G work hard every day such that they would have a positive impact on the life of people they meet every day with. Leaders in P&G are tasked with the responsibility of maintaining a clear and a regular purpose. Leaders have a duty to understand and culture the role and dreams of its staff. Leadership is therefore more of a calling (Galbraith). For an organization to grow leaders must put much of their effort on driving success into their way and in most cases success is a man’s hope (Kraemer). Every living person always wishes to be among the winning team. Leaders are therefore tasked with the responsibility of building a team which is motivated toward winning. Leaders of an organization should treat his or her employees as a team working together, this is because as a team, we all work for a specific objective of achieving the best, but in many organization most leaders treat their staff as workers and not their team members this significantly reduces the employee passion in their tasks. Leaders should direct their efforts in improving their staff efficiency, and not witch hunting them for mistakes since time is always limited. Success in an organization entails turning challenges into successful ventures. It is widely believed that success is contagious and as such a breakthrough in one event is followed by a very high likelihood of another successful venture. As leaders their major task is igniting life changing fires that will be able to drive the virtuous cycles of success in an organization forever. Another great role of leaders is to look for the right people to work in the industry; they should be able to identify talents which are able to fit to their organizational culture within a shorter period of time (Ullmann). This is because people perform well if they are given a chance to do what they like doing most and as such they will be able to exploit their potential. It is worth for an organization to invest wisely their employees strength by ensuring that each and every individual work in the right place to avoid employees who are unhappy in their place of work, because happy employee means an efficient service delivery. Also one of the crucial requirements for a good leadership in an organization is character. Character would ensure that the leader puts the organizational goal to be more important than anything else. It is normal for people in any organization to follow a leader with character and such leaders always portray a king of leadership normally referred to as value based leadership. This sort of leadership ensures that leaders value the organizational goal than their own individual goals. A good character always has a high level of accountability and responsibility. Leaders should give credit where it’s deserved and likewise if something wrong happens under their watch they should also be able to account for it by taking responsibility for the outcome. The critical success factor which any leader ought to do is that they should learn to do the right things always. This will not only maintain the brand name but they should be able to uplift their integrity always since they are not willing to compromise quality or anything else. If something is hard to do its worth to do it right because if we do it wrong then definitely the outcome will be disastrous (Ballou). Diversity is another crucial issue in which leaders should embrace. (Kraemer 2011) This is because people are more innovative if they are diversified unlike if they are just a single homogeneous. It is out of diverse mind that innovation can be perceived. Innovation therefore is a requirement which comes out of diversity of people. Leaders should therefore be able to create an enabling environment where innovation and connection can be made. After connections are made then the next phase of business progress is to collaborate. Most leaders follow the “Platinum Rule” which advocates that we treat others the way we want to be treated always. It is therefore prudent that leaders know their team members well if they want to gain an understanding of how they are treated. Organization should be able to do away with systems and some cultures which are very ineffective in delivering the desired outcomes. Such kinds of systems and cultures can be a big hindrance towards achievements of the organizational goals (Galbraith). Leaders should therefore be trained well on the organization culture and system such that they will be able to deliver the same to their team in a very effective manner. Organizational results to a great extend are determined by the system we have in place. Good output is therefore the result of good system, culture and a good team leader. Leaders should further be taxed with the role of identifying gaps among the team such that each and every team member works in the right place in the organization such that they will in a position to improved their careers. As the organization grows it is necessary to renew it. This is because changes require renewal, and again we are living in an ever changing and dynamic world. In these era things accepted today as standard might be done away with after five years and in doing so leaders must ensure that their staffs are equipped with the necessary training to its members such that the team also grows. As some companies grow other stagnate as a result of failure to build capabilities required to run new and emerging systems. It’s therefore necessary for leaders to identify systems which becomes obsolete after some times and build necessary capacity for an effective transition should there be changes in future. Human Resource policy and Practice in Proctor and Gamble The initial business focused on soap and candle production. The company had a culture of treating its employees to be like their family members. It had very strong bonds and relationships that went deep beyond work duties (Lafley). Their employees therefore have developed a strong sense of value and an all equal dignity in the organization. The organization over time has been able to embrace an all rooted kind of value leadership bound with responsibility, a sense of ownership, personal and unquestionable integrity, and a culture of a winning team with an all round trust. The company has encompassed a tradition of mutual respect for all its members and they have been able to integrate member’s interest with the company’s interest. The work is target primarily on meeting business goals. While recruiting, the focus is on employees who are able to have a positive attitude towards work and a passion of building future leadership of the organization and be in a position to establish a lasting family bonded with friendship among its members. Therefore the company takes time during recruitment process and they move around the globe looking for talents who are able to maintain the organizational set standards over time (David). The growth of P&G has been build traditionally from within and as such they are able to instill a culture of complete ownership of the organization and they always encourage their staff to be part of the shareholding team such that they would all be concerned about the company’s future trading position always. In doing so, they end up looking for better talents who are able to take care of the organization in future. The major acid test of a leader is the immediate and long term performance of an organization during times when they would not be around in future As the organization grows it is necessary to built and nature leaders such that as the old leaders opt out of the organization we should have built enough capacity to steer head future leadership of the organization. This will avoid the organization incidences of creating leadership vacuum should they exit from the organization but instead they should be able to run effectively should they be there or not. It is this kind of culture which is an indicator that the organization will be able to run successfully in the future generations. Organizational challenges For any organization to succeed it is necessary that they identity ways of addressing coming challenges with a good strategic plan without hampering other vital programs in the organization (Woodward). Challenges exist both within and outside the organization and how we handle them greatly can influence the future of our institutions. Proper identification and definition of challenges facing an organization are very ideal in determining the probability of getting certain goals in the long run. Exact identification can further aid in proper formulation of policies and procedures which are necessary to drive the organization into the future successfully. Organizational structures don’t fail but leaders fail to implement the system structures well and this courts failure (Galbraith) Challenges in an organization should not be viewed as threats but we should be able to look at them as opportunities for future growth. If challenges are turned into opportunities the organization can be able to move into great heights and likewise if they do it wrong during identifications and addressing them, then the organization can be breeding a disaster. The organization should therefore put up good measures in terms of strategic plans and to be able to address the challenges they have identified. The organization should therefore be able to address the issues of technological innovation and adoption and be in a position to meet the changing market needs continuously. The company should be able to question how they do business effectively. They should be able provide mechanism for stimulating rigorous growth and be in a position of doing away with bureaucratic tendencies. This will enable the company to come up with products which are able to address customers’ needs and demand in the market. Understanding or having the knowledge of the existing strengths which the company has, its level of vulnerability, prevailing opportunities and the possible threats is an ideal mechanism for ease of identification of challenges for any visionary company (Kraemer). The organization at all level should be able to analysis frequently and critical evaluate issues in the market place for example competitors, cost of production existing relationships with customers. All these will ensure the organization is up to date with necessary information and be able to put up its priorities well. Regular monitoring of the external environment is always very necessary as there is some technological advancement which if not addressed earlier can have a considerable adverse impact on business in terms of competitors. This is because technological advancement in information technology has significantly influenced the way business is run and managed (Kathie Cooper). For example if companies do not keep up with technological advancement then in a way they can be the victim of technological obsoleteness for example the case of IBM who was not able to keep up with changing technological needs over time (Bornstein). This is an information age, and it is necessary organization address upcoming market needs effectively. Organizations should address the issue of the status quo in business as a reality which can assist in identifying and addressing upcoming challenges well. Companies should therefore invest heavily in addressing the aspects of business operations like efficiency, inventory turn over’s, and other issues which are ideal in stimulating identifications of organizational challenges. The organization is also faced with challenges associated with increasing productivity by investing less and be in a position to reap more from less input. The organization has been able to come up with new officers for example the office of productivity and Organizational Transformation Officer as a way of creating a more lean organization (Galbraith). The organization should therefore be in a position of striking a balance between growth and productivity. Therefore P&G should put in place a leaner and a highly nimble organization if it should continue remaining successful in its dealings globally in terms of competition for both short and long term business. The success of P&G has been its ability to have pleasing fickle consumers who have been able to consume their products irrespective of the changing and dynamic economic environment (Doyle). This should not be assumed by the organization to mean a constant factor which is not changeable instead the organization should move ahead and come up with products which are more reflecting of the ever changing consumer taste. The company is again further faced by the challenge of phasing out some products this is in spite of the company having done so in the past and developing new products (Blythe 2006). The company should therefore try to invest heavily in product mix which will be able to retain its brand characteristics and be in a position to meet the needs of their loyal customers. The company should be able to invest heavily on new innovations which are able to come up with products meeting constant changing customer needs. Recommendations and Conclusions On human resource practices the organization should emphasis a safer, health and happy employees (David). This will provide an enabling environment for its many staff and the and in doing so they will feel at home and be in a position to stay on the organization for a longer period and as such the organization benefits from their vast experience and employee loyalty. The organization should put up measures to be able to collect staff views regularly through regular surveys. The organization should establish an all inclusive book management style which will allow complete sharing of information between the management and their staff. This will create a situation whereby the staffs are enthusiastic with business and likewise to their management. In the long run the open book system will built a culture of an all participative. This system ensures that the staff are part of the decision making process in the organization and they will feel appreciated always. This system further build trust and instill motivation on the staff. The organization should come up with strategies for rewarding their employees and these bonuses should be begged on performance. Good compensation plans in an organization can be have positive impact if administered in a more transparent manner. Failure to compensate with integrity can be disastrous to the organization as it can create a lot of frictions within the organization (Chistensen). The whole process of bonus reward should be judged from the individual performance or a collective team result. This therefore calls for a performance review which is measurable. Lastly feedback system in an organization should be all inclusive such that the feelings of all employees in an organization from the junior most to the top management are listened to without bias. This system will therefore ensure that the opinion of each and every member of the organization matters. In conclusion if an organization has to remain relevant in business it is necessary that and remain in business successfully. It is ideal that the organization should have an all round knowledge in terms of innovation and detailing the required steps for its implementations are the very needful issues which need to be adhered to. Innovation takes root if employees or a group of staff are in a position to transform the problem identified into a business idea. The new idea is therefore the result an answered questions and barriers. Ideally the all process of innovations begins from problems which are bound within an organization and which it needs answers (Blythe). After coming up with an innovation it is necessary that the same form of innovation have a system in place within the same organization, the system can either be formal or informal. A formal system means they were designed by the management or the leaders of the organization (Bennett). An informal system is in place if the same system is taking place away from the laid down channel. ASKME Enterprise is a type of formal innovation which P&G have employed and used widely. Without passion in the employee the whole system might not run as effective as it should be if the staffs do not have the passion to fuel such kinds of system. When ideas prevail in an organization only if the staff are passionate about the system they are in. It is therefore necessary that all working members of the organization become familiar with each other. This will ensure that they work as a team and be in position to achieve together as a family. P&G has encouraged his staff to always become innovative and it is a culture which has taken great routes in the company. Leadership has played a very critical role in the P&G Company (Ballou). The organization has been able to culture and built visionary and revolutionary leaders for many years and this has made the company to pride of success and branding itself further into many corners of the world. The leaders have tried at all level to inspire young talents and nature them into great future professionals. This has given them an upper hand in taming competition from the ever changing and dynamic market needs. The company through its innovative workforce has been able to keep up with customers’ needs. Work Cited Ballou, James. "Leading Change: the argument for values-based leadership." Ballentine Books, 1996. Bennett, Mitchell. "The Procter and Gamble Company. A strategic Analysis. Procter and Company." 2009. Blythe, Jim. "Principle and practice of marketing." Cengage Learning EMEA, 2006. Chistensen, C. "The innovators dilemma: When new technologies cause great firms to fail." Boston MA: Harvard Business School, n.d. 1997. David, Bornstein. 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