HISTORY•On October 31, 1837, Procter & Gamble was created.

•founded by William Procter and James Gamble, both from the United Kingdom

• headquartered in downtown Cincinnati, Ohio, United States

Growth through the Years using different organizational structures

•In 1948, P&G established its first international sales division to manage its rapidly growing foreign businesses.

•In 1954, P&G created individual operating divisions to better manage growing Product lines of products, supported by its own line and staff organizations.

• In 1987, the matrix reporting structure entered the scene, whereby functional leaders reported directly to their business leadership and also had a dotted line reporting relationship to their functional leadership.

•In 1998, P&G announced a six year restructuring plan called organization 2005

 

Whether to make a strong commitment to the organization 2005 or dismantle.

A.G. Lafley should consider dismantling the structure after a careful analysis of the previous structures of Proctor and Gamble and a thorough assessment of the negative adverse effects of Organization 2005 so as to develop a more effective global structure.

Can P&G Reinvent Itself?“The problem with being an innovative company is

that you can never stop innovating,”

•Connect & develop placed a high priority on the “connections” but Not much emphasis on developing breakthrough innovations.

•Home run approach, the “singles” strategy failed to develop Sufficient sustaining business

Is International Expansion Through a Joint Venture or Foreign Acquisition Right for P&G?

Seven global business units (GBUs) based on product categories replaced the P&G’s four geographic

business units

Geographically based structures:

•key advantages of widely spread markets can be catered for, local knowledge of customers, labor market and distribution can be utilized

•key disadvantages as with any attempts at decentralization are associated with the inevitable tension that develops between Head office and the regions concerning priorities for action andpriorities for scarce company resources.