Sustainability Strategies for Proctor Gamble

Sustainability Strategies for Proctor Gamble1. asylumProcter and Gamble is an ecesis which produces diverse reapings, and its ambition is to r distributively the consumers demand. PG began in the 1911 with the solution of creation by producing altogether time a polar crossing. For every crop they go through trey stages. The first stage was to ramp up ripe call for products the second was to proceed with the successful products with suitable quantities and the third is to ready more than investments of capital to en wide-ranging the guild. These three stages preserve the success of PG.PG is a international corporation with 156 branches in more than 70 countries. There ar three main extendment centers, the first center is in Ger umpteen in which penning products like Al right smarts and Pampers be checked. The second is in Brussels, recitationd to develop detergents. The last center is situated in the get together Kingdom where clean and shampoos argon develo ped.PGs environmental science department plays a unique portion to ensure that their products ar safe to use for the consumer as well as for the environment. Environmental safety is an internal part of the fictional character that PG builds into its every product. The lodge is committed to produce silk hat quality of products to refine the consumers of whole populace.The familys unfeigned fulfillance could be deduced by looking at its 2009 Annual Report. Its cosmopolitan net earnings for the year 2009 were 13,436 cardinal million million million dollar, which is 13.61% increase oer the foregoing year. It has total pluss of $134,833 million and liabilities of $71,451 million. PG has been paying a dividend for 120 consecutive long time since its incorporation in 1890 and has increased its dividend for 54 consecutive years at an annual compound average rate of approximately 9.35%.This is an evidence of how such(prenominal)(prenominal) consumers demand PGs product and h ow this initiates the company to develop 300 targetmarks to satisfy volt one million million million consumers all over the world.Alan G. Lafley became chairman of PG in 2000, he make it clear that he wanted understructure across the spectrum-in how the company invents, commercialises, manufactures, and distri andes its products.2. Methods2.1 entropy collection methodsWe get the selective randomness from the documentary analysis of the PG which come from the website of the PG. The entropy is easily accessed in the internet. PGs annual plans atomic take 18 useful in the research. At the same time, we keep contact to PG via emails. They sacrifice us learning on the plan of the companys maturation.2.2 Issues and challengesBiases polar comments of PG in massive aspects, often find data from some scheme inwardly the PG. that circumstances may grammatical case biases, which lure comments to become less verifiable and even flattery. It is signifi dejectiont to dist inguish the information because possibly comments on one aspect could go opposite and cause dilemma.Detailed resource constraints it is non difficult to find general information about PG. However, it was not easy to search details and depth objections. Although, connecting PG for details may fake, yet it cannot be certain that the opinions gained from PG are 100% objective and real.Collecting from dispersive information a studyity of resources is dispersive. It means more time consuming and less efficiency. Also some information may mislead ideas to somewhere wrong.2.3 Analysis with the analysis of companys annual report, we bop the performance of PG. according to the body social ashes and purification of PG, we can forecast the development foreground. We evaluate the approaches to prudence and lead. We use the view of a manager, trying to give out a better carriage. We are ground on guidance principles and analysis the existing business model. PG has a unique patt ern in the business counseling which was widely praised by consumers.3. Business dodging, mission and marks3.1 IntroductionPG products touch the lives of heap around the world billion times a day. This happens because PG provides products of best quality to improve the lives of all consumers around the world. This resultants in sales, pull ahead and value creation, amongst the company and the consumers in which they operate to prosper. Its business is carve up into three worldwide units looker, health and well being, and household care. It overly makes front-runner food and water filters and produces soap operas. Some products of PGs brands are billion-dollar sellers, including Gillette Fusion, Always, Braun, Bounty, Charmin, Crest, D experiencey/Lenor, Folgers (which it reportedly plans to spin off), Gillette mach 3, Iams, Olay total, Pampers, Pantene pro v, Pringles, Tide lemon jasmine, and Wella, among others. The above products were mentioned by Robert N. Lussier(20 09) in annual report 2009.The PG consists of over 138,000 employees working in over 80 countries. It began as a small, family-operated soap and Candle bon ton which now not only provides products but also concentrate on services of best quality and value to consumers in more than 180 countries. In PG, they are focvictimization their efforts on where they can make the most meaningful oddment in both environmental and hearty Sustainability. check to Andrea Redmonds (2010) research, their dedication begins with PGs Purpose, determine and principles, in which Sustainability is embedded, and manifests itself in a transcriptionic and long-term way. They try to make their company better.3.2 Mission and goalsIn 2007, PG implemented five strategies to Sustain goals for the future. In March of 2009, PG made a progress to emphasize their commitment to reach out more significant goals. The five strategies are as follows dodging1Products Delight the consumer with sustainable foundation garments which improve the environmental profile of the products.They keep back developed the market which was at least $50 billion in cumulative sales of sustainable grounding products, and products that keep an improved environmental profile.Strategy 2operations Improve the environmental profile of PGs own operations.An additional 20% lessening (per unit outturn) in CO2 emissions, energy consumption, water consumption and devoted waste from PG plants, leading to a total reduction over the go of at least 50%.PROGRESS(percent reduction per unit production)SinceJuly 2007SinceJuly 2002 nothing Usage11%48%CO2 Emissions10%52% down Disposal30%53%Water Usage13%52%Strategy 3Social responsibility Improve childrens lives through PGs social responsibility programs. Enable 300 million children to Live, Learn and Thrive. They prevented 160 million days of disease and also saved 20,000 lives by delivering 4 billion liters of pure water for the Childrens Safe Drinking Water program.Strateg y 4Employees Engage and equip all PG employees to build Sustainability thinking and practices into their everyday work.Strategy 5Shareholders Plan the future by working transparently with their shareholders so that they can work with freedom to innovate in a responsible for(p) way.Beside the five strategies, they take on several goals on the market.1. Designed to MatterIn PG, they focus the Sustainability efforts on advances that matter, to make the most meaningful impact they can.2. Purposes, determine principlesPGs Purpose, Values Principles formulated their shared resource, a common sets of behavior and their beliefs about the business and its potential.3.3 Marketing strategyMany people think that multi-brand strategy depart result in a stead that internal challenger happens, but P G call backs that the best strategy is to compete with their own product. Gary Armstrong (2009) said this is because the market economy is a competitive economy, while its opponents to deve lop impertinently products to share the market. As their challenge themselves and overcome their own, so that their productsbrands may occupy a different market, in order to consolidate its leadership position.1. Differentiated brandsIf P Gs multi-brand strategy to be understood as apparently more brands, it would be wrong. Actually the pursuit of similar products, the rests between different brands, including features, packaging, promotion, etc., to form each brand distinctive, such as Procter Gamble brand strategy so that each brand has its own development, the market will not overlap, and it will not lead to market its brand in the consumer confusion. The words above are supported by Piero Morosini (2005)2. Manufacture of USP check to the report, USP means unique selling proposition. It is proposed by the American advertising guru Rosser Reeves (said brent goose Green 2006). Marketing theory the core of its content Advertising should be according to the characteristics uniq ue to the consumer for rhetoric,and allow consumers to believe that this feature is not operable to others or others not mentioned. These features can bring tangible benefits to consumers.3. Unique way numbers brands in one judicatureAs Michel Philippart (2005) and Hangzhou da Xues (1994) study, multi-brand strategy is very difficult to imitate. While a single image of the brand extension strategy to facilitate the unity of instruction, reduce marketing embodys, easy-to-be customers to accept, but it is not guaranteed, because of a branding, the easy formation among consumersfixed image, resulting in the customers lookout is not conducive to the extension product.4. Overall structureThe Procter Gamble Company (PG) is divided into three main worldwide units, which are household care, beauty and grooming and health and well-being (Marketing magazine 2009). Every units report is send to Susan E. Arnold, who has been promoted from vice chair of PGs beauty and health department t o the position of chairman of global business units. The beauty care section is also managed by Susan Arnold. PG has restructured its hierarchy of top executives, who include Arnold, in order to meet the ever-changing need of their larger, more flexible and closeer-paced global business. Lafley, who is the chairman of PG, announced that PG has nearly doubled its business since 2000 with the acquisitions of the Clairol, Wella hair care businesses and Gillette. The change in structure is designed to meet the needs of a larger business that is also developing new initiatives faster than in the past (Balendu 2007).Initially, PG managed its international operations through an international division of foreign expansion, in the same elbow room many other international enterprises. A variety of products were identified to tick off national differences and preferences. Consequently, a portfolio, consisting of subsidiaries, run by country general managers was ceremonious. However, t his solicitude structure may result in two basic chores. Firstly, the cost of operating these subsidiaries is high, and secondly the ferocious autonomy of national subsidiaries prevented the global honk out of new products and technology improvements (Lin, 2008 9). Therefore, PG needed conversion in the subsidiaries management structure. It concluded that the matrix structure, in which subordinates report to more than one captain (MacKenzie, 200222), is a better alternative for PG, as it allows ascendence to be unploughed at lower levels. However, most firms would turn in some difficulty implementing this matrix structure into their organization because it is difficult to organize multinational activities through this convoluted structure. For example, dual reporting can lead to disagreements and confusion and a workable overlap of responsibilities. This may result in a loss of function and wastes time. Through time PG has been trying to optimize its structure. The curr ent structure resulted in a culture deep down PG, which was viewed as remit, conformist and endangerment-averse (Lin, 200811). This led to a decrease in productivity and an increase in inefficiency in the organization. Moreover, these factors would slow down the decision making process and reduce the competitiveness of the company. Although, the management structure of PG seems imperfect at the moment. However, the Procter Gamble Company is still a giant in the area of consumer goods and the leading maker of household products in the United States. PG operates its business in over 80 countries around the world and has approximately 300 brands in more than 160 countries. The matrix structure helps PG develop its global business structure into more specialised areas. As a result, the company has become more flexible to change inside market competitions and the different expectation of PG.The final stage of completing the innovation process of management structure is to transform the formal structure and responsibilities of the company. For example, the global business units of PG were established in order to manage product development, manufacturing and marketing of their respective categories all around world. Furthermore, global business service units were established to organize with the transactional activities such as Accounting, HR, IT, etc. Eliminating bureaucracy and increasing accountability is another main objective of structure change (Bartlett, 2004 Chp 4).The Procter Gamble Companys incorporate structure has been mainly dependent on worldwide subsidiaries and merging. During this time of restructuring, PG has keep its active acquisitions pace. For instance, PG entered the European tissue and towel market through the get of Vereinigte Papierwerke Schickedanz AGs European tissue unit and added the luxury fragrance business of Giorgio Beverly Hills, Inc. In the same year, PG returned to the South African market following the lifting of U.S. sa nctions. PG has altered its geographic management structure gradually. As a result, PG has divided its operations into United States and other countries, which mainly includes four regions North America, Latin America, Asia and Europe/ sum East/Africa.PG announced a new restructuring initiative in kinfolk 1998. A key factor of this restructuring was a shift from an organization concentrate on around the four geographic regions to one centered on sevener global business parts based on product lines despoil tuition, Beauty Care, Fabric Home Care, Feminine Protection, Food Beverage, Health Care Corporate overbold Ventures and Tissues Towels. PG has continued to restructure and adapt to different markets and different financial situation worldwide. According to a firm press kick announcing the new structure, This change will drive greater innovation and speeding by centering strategy and profit responsibility globally on brands, rather than on geographies5. PGs CultureCultur e plays an definitive role in any organization to run their organization well in this fast growing business world. According to Scheins theory of culture it is defined as A pattern of shared basic assumption that the group knowledgeable as it solved its worry of external adaptation and integration that has work well enough to be considered valid and therefore to be taught to new members as a correct way to perceive, think and feel in relation to those problem-(Scheins 1992, p12, italics altered). According to Schein organizational culture is the acquired outcome of group experience, as it is to a large extent unconscious. Schein considers culture to the three layer phenomenon.From discover 1 it is clearly seen that the organizational culture comprises of three layers first one is the artefacts, espoused set and underlying assumption.ArtefactsInnovation culture is the mission statement of Procter and hazard organization in which they state that the consumer is gaffer, consumer should be the heart of all PG do from ideation stage through the purchase of the product. For example if 30 seconds with a deodorant or one minute with a disposal napkin have made a small part of your life a brusque bit better then PG made a difference. PG policies made the company a unique one that respect of governments and law, respects in piece of work and respect in the market place (annual report of PG, 2005). PG is a multinational company and it is widely spread geographically. They maintain open work formation in lots of work places around the world. Executive offices do not have doors. Leaders do not have a writing table cordoning them off. The executive floors on all the offices at Procter and stake are open, assembly room is an open round space. They made it round as a small symbol of the new approach (Lafely .A, 2000 chief operating officer of PG).Espoused setPG is having hierarchy of company ethics principles. PVP(Purpose, Values and principles), corporate polic ies, worldwide business exile standards, operating policies/procedure/practices. For over 170 years PG purpose values and principles has been guiding the way they do business and it is certifyn in the fig 2 below. There purpose is to provide branded products and services of superior quality and values that improves the lives of the worlds consumer. PG lives with its people and values, they recruit the finest people in the world who strengthened organization by promoting and rewarding people without regard to any difference related to performance. Lafely said that PG have been fortunate that some of this flexible varied ethics exist in our heritage. For example Procter and Gamble pioneered a system which is technician based in its manufacturing plants during the 1960s and 70s. In this system they avoided the approach in which one person assigned to do only one job. The technician system still operates today and working well. To get the highest evaluation rating in PG factory, you learn how to do all the jobs on line and once you have that rating, company expect you to be that much capable of problem identification, problem solving, and innovation. This background has made it easier for company to plug manufacturing and engineering in to the innovation culture. PG CEO Lafely said in one conference that once people in our organization have wined at innovation then you can see the energy in the company changing. People at PG routinely says that we can do this, this is feasible and the change of attitude of the people in PG is incredible to watch. Integrity, leadership, ownership, passion for winning and trust are the main plus values of PG. By considering purpose and values they made their principles like the show respects for individualist, interest of the company and individual are inseparable and innovation is the cornerstone of PG success. These are the officials objectives which had been espoused by the company head and it is common for PG organization all over the world.Fig 2 PVP of PG 2003 sustainability reportUnderlying AssumptionsIt consists of unconscious, interpreted for granted beliefs, perception, thoughts and feelings. PG are having problem relating to external adaption and internal integration. PG keep nicety their products, launch model from ideas, to prototype, to development, to qualification and to commercialization. Applying this sequential practice on large scale and replicate them does not mean to eliminate judgment, thats why PG needs active leaders and a strong innovation culture. Therefore PG introduces the inclusive culture for leaders and they expected to build inclusive work environment that welcomes and embraces diversity an environment where people feel comfortable. Forced diversity readying/learning process are utilized to equip leaders to values and nurture difference in management experience, style of leadership and problem solving approaches.By analyzing the PGs culture it is seen that PG is having a strong and dominant culture and that culture follows in every part of the world. Innovation is the main theme of PGs success and to bind organization culture together.6. PGs management leadership advanced Management and Leadership of PGWhen we observe organizations and try to classify, we tend to classify them in terms of their success and describe them as highly successful, successful, struggling to succeed or unsuccessful. There are certain factors influencing their success. Management in the organizations has to perform some functions like planning, organizing, staffing, directing, leading and controlling for success. Management consists of implementation of the vision and strategy provided by leaders, coordinating and staffing the organization and handling day-to-day problems.By Koontz and Weihrich management is the process of designing and maintaining an environment in which individuals work with such performance for optimizing efficiency in reaching goals.HENRI FAYOL identi fied the main operations in business management- technical, commercial, financial, security, accounting and administration. The administration function he tho subdivided into organizational, coordinating, commanding, controlling and purveyance. The purveyance further included the concepts of forecasting and planning.iPG was facing certain disadvantages using the Henri Fayol method because it was not an empirical but more theoretical. Moreover PG wants to be mod and wants to differentiate products by its formation. So they adopted the Cooper-Kleinschmidt study of innovation method which was based on the triangle process.The Innovation Diamond in Exhibit 1 began as a triangle process, Resources, and strategy the result of a 1990s Cooper-Kleinschmidt study of innovation across a all-inclusive range of businesses.4 Procter Gambles management in the 1990s subsequently transformed the triangle into their Initiatives Diamond, shown in Exhibit 2.iiThe Innovation Diamond is a guiding modelling to help management focus on whats classic to success innovative strategy, a good idea-to-launch process, portfolio management, the climate and leadership.PGs Initiatives Diamond serves as a hand for each businesss product innovation efforts, and helps to focus managements attention on what is important to success. Heres what Bob McDonald, PGs Vice Chairman of Global Operations, says The Initiative Diamond contend a significant role in improving the business results in PGs Fabric Home Care global business unit. This work brought us a new discipline to manage our innovation programs, and yielded a major increase in the in-market success of our initiatives. We aligned our organization on how to use Stage-Gate success criteria and portfolio and resource management to deliver better innovations for the consumers we serve.iiiThe top fractional of PGs diamond in Exhibit 2 is strategic in nature, and captures the businesss product innovation strategy goals, the mix of new p roducts compulsory to meet those goals, and the required resources. Portfolio management (or project selection) is thus closely connected to strategy. The bottom half of the diamond is more operational and focuses on delivering specific new product projects or initiatives what resources mustiness be put in place for each project and how individual new product projects are managed so they succeed using PGs idea-to-launch SIMPLTM Methodology? Thus how the PGs business success has been generated through cerebrate on magnetic coreive innovative Management.Peter F. Drucker says Leadership is the lifting of mans thinking to higher(prenominal) sights, the increment of mans performance to higher standard, the building of mans personality beyond its mean(prenominal) limitation. Alan Bryman offers the working definition of leadership as the creation of a goal about a desired future state which seeks to mesh every members of an organization in its net. Many commentators trait spotting app roach to have argued or assumed that the performance of an organization depends on the quality of leadership exercised by its leaders same is the case with PG organization. The single most let thing PG leaders can do is to identify develop our following(a) generation of leaders. If we can get the right people with the right skills and experiences in place to run our business, the rest will take care of itself. By Lura Mattimore, Director, Leadership development PG. So the leader is someone who exercises influence over other people leading is a process of actuation. It provides an electrifying effect to the organization makes people action-oriented and bridges gaps within the organization. Distribution of work, delegation of authority and supervision of work should be done meticulously.There are miscellaneous approaches to leadership such as trait spotting, style counseling, content fitting, New leadership. PG uses the trait spotting approach to leadership. PG leaders are built from within because they believe that their future success is broad(a)ly dependent on the current strength of talent pipeline. So the first trait spotting in PG is done by PG leaders itself who select the next leader of the company by searching a quality of dedication towards the work. PG leaders are not born leaders at first they are provided the ordinary people of the company. For PG people are the company most important asset. Their success depends entirely on the strength of the talent which they build from within manage with a disciplined process led by the CEO the senior leadership aggroup. This is an essential element of how PG is designs to lead.Thus PG develop leaders whose purpose is to centre on improving more consumers lives in all parts of the world. Thus PG uses two dimensional style of leadership because it concerns for the production as well as for the people. People are the main asset of PG and for production they always wanted to get differentiated by their i nnovation method. Thus PG uses the two dimensional style. (Blake Mouton 1964)According to the Likerts there are four leadership systemsExploitative AutocraticBenevolent authoritativeParticipative democraticDemocratic leaders have complete confidence and trust in their subordinates, they allow the subordinates to make decision for themselves these types of leaders always motivate their subordinates by reward for achieving goals and to share the new ideas and opinion.PG uses the democratic type of leadership system. They believe to build their organization from within PG consider their most important asset as the people of the company because of their faithful work excellent performance. Procter gamble respect all employees and consumers and offer them their trust on condition that they shell out them similarly.PG also uses servant type of leadership because they always feels that the customers are the boss .And in servant leadership, leaders put the needs of their followers first . According to the John Adair Leadership is a social process in which an individual influences the behavior of others without using the path of violence.Below is the example of how the innovative product is developed under the innovative leadership of PG, which shows some relationship between leader and follower of the PGs.PG crank up on one on one consumer research, so the marketers of PG spend a time with the consumers, watching the way they wash, clean their floors, diapers their babies and asking about their habit and frustration. So based on this one on one technique PG opened a diaper -testing centre right down the hall of their office, where moms watch their babies get undressed, diapered, and metric by PG technicians. So one thing the PG learn from this experience is that parents are frustrated by the time it takes their youngsters to be toilet trained and they have to change their diapers every time when they wet those. So thus based on the comments received from the paren ts PG launch their new innovative product in the line of pampers whose mission was to dry diapers to helping moms with babys development. Thus how the PG is always innovative in the way of leadership to find new products which improves their relationship with their followers, as the consumers are the main boss of the PG.7. Future AspectsStrategy improvementThrough analysis of P Gs multi-brand strategy we realize that many of the benefits of this strategy are clear, but it is very difficult to achieve in the market, they have to transmission line that several aspects of business practice.According to Sanjay Tiwari (2000), they can make some improvement by the ways below.A company which operates a variety of brands must have the appropriate strength the work of brand extension is complicated.From market research to product launch, to advertising, every job has a large number of enterprises to spend manpower and material resources.In the specific operation, they must be through caref ul investigation, to find the product differentiation.The industries in which according to the specific situation of enterprises, such as Procter Gambles consumer products industry which with easy access to a successful multi-brand strategy.Structure ImprovementThe improvement of structures of PG possibility could be to have wholly autonomous temporary groups or teams that are responsible for an entire project, and are split up as soon as it is successfully completed. Teams are often not very good for decision-making, and they run the risk of relational problems, unless they are small and have a lot of self-discipline. Actually, team members still require a definite leader, which is indicated from decentralization. It means the separation of the organization into competing autonomous divisions. PG has various branch brands, and some in one subject. emulation between own brands may seems unreasonable. However, changing corporate structure may encourage positive challenges among PG. In addition, appropriate manipulating probably is required during the management process.On the other hand, some inefficiency brands or areas may better to be abolished for saving funds and decrease expenses. Decision- making is very crucial of this innovation, which is easy to regret if prediction is wrong. Various differences of brands among PG could be helpful and practical in different occasions. However, this improvement could go to the opposite and create unexpected situation because sometimes the market could be influenced by news in many ways.