Sustainability Strategies for Proctor Gamble

Sustainability Strategies for Proctor find1. IntroductionProcter and Gamble is an constitution which produces diverse harvests, and its ambition is to reach the consumers demand. PG began in the 1911 with the theme of innovation by producing altogether time a different product. For all product they go finished three stages. The first stage was to make innovative needed products the sec was to expire with the conquestful products with suitable quantities and the third is to prolong more(prenominal) investments of capital to en commodious the comp both. These three stages preserve the success of PG.PG is a multi home(a) corporation with 156 branches in more than 70 countries. There argon three chief(prenominal) development centers, the first center is in Ger many a(prenominal) in which paper products like Always and Pampers ar developed. The second is in Brussels, pulmonary tuberculosisd to develop detergents. The last center is situated in the United Kingdom where soap and shampoos atomic number 18 developed.PGs environmental science department plays a unique role 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 quality that PG arrive ats into its e rattling product. The Company is committed to produce best quality of products to refine the consumers of whole world.The caller-ups actual surgery could be deduced by looking at its 2009 Annual Report. Its planetary net earnings for the year 2009 were 13,436 million dollar, which is 13.61% increase over the prior year. It has total assets of $134,833 million and liabilities of $71,451 million. PG has been paying a dividend for 120 consecutive years 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 much consumers demand PGs product and how this initiates the company to develop thre e hundred brands to satisfy five million consumers all over the world.Alan G. Lafley became chairman of PG in 2000, he made it clear that he cute innovation across the spectrum-in how the company invents, grocerys, manufactures, and distri only ifes its products.2. Methods2.1 Data collection methodsWe permit the data from the documentary analysis of the PG which come from the website of the PG. The data is easy accessed in the internet. PGs annual plans are useful in the research. At the same time, we keep contact to PG via emails. They give us development on the plan of the companys development.2.2 Issues and challengesBiases different comments of PG in massive aspects, a great deal find data from some organization within the PG. that circumstances may cause biases, which influence comments to give way less objective and even flattery. It is significant to fall upon the information because possibly comments on one aspect could go opposite and cause dilemma.Detailed resour ce constraints it is not difficult to find general information roughly PG. However, it was not easy to search details and depth objections. Although, connecting PG for details may work, yet it cannot be certain that the opinions gained from PG are 100% objective and real.collecting from dispersive information a majority of resources is dispersive. It means much time consuming and less efficiency. Also some information may mislead ideas to somewhere wrong.2.3 AnalysisThrough the analysis of companys annual report, we know the performance of PG. according to the complex body part and culture of PG, we can forecast the development foreground. We evaluate the approaches to forethought and leadinghip. We use the view of a manager, trying to give out a better way. We are base on focussing principles and analysis the existing credit line model. PG has a unique pattern in the business management which was widely praised by consumers.3. Business scheme, committal and goals3.1 Int roductionPG products touch the lives of hoi polloi 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 results in gross revenue, profit and take to be creation, between the company and the consumers in which they operate to prosper. Its business is divided into three global units beauty, health and well being, and household care. It also makes pet 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, Downy/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(2009) in annual report 2009.The PG consists of over 138,000 employees running(a) in over 80 countries. It began as a small, family-oper ated soap and Candle Company which now not only provides products but also concentrate on go of best quality and value to consumers in more than 180 countries. In PG, they are focusing their efforts on where they can make the most meaningful difference in both environmental and social Sustainability. According to Andrea Redmonds (2010) research, their dedication begins with PGs Purpose, values and principles, in which Sustainability is embedded, and manifests itself in a schemaic and long-term way. They try to make their company better.3.2 Mission and goalsIn 2007, PG utilize five strategies to Sustain goals for the future. In March of 2009, PG made a progress to emphasize their commitment to fulfill more significant goals. The five strategies are as followsStrategy1Products Delight the consumer with sustainable innovations which improve the environmental profile of the products.They have developed the market which was at least $50 billion in cumulative sales of sustainable inno vation products, and products that have an improved environmental profile.Strategy 2Operations Improve the environmental profile of PGs own operations.An additional 20% simplification (per unit production) in CO2 emissions, energy consumption, water consumption and disposed waste from PG plants, leading to a total reduction over the decade of at least 50%.PROGRESS(percent reduction per unit production)SinceJuly 2007SinceJuly 2002Energy Usage11%48%CO2 Emissions10%52%Waste Disposal30%53%Water Usage13%52%Strategy 3Social responsibility Improve childrens lives through PGs social responsibility programs. Enable three hundred 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 inebriety Water program.Strategy 4Employees Engage and equip all PG employees to build Sustainability thinking and practices into their everyday work.Strategy 5Shareholders Plan the f uture by working transparently with their officeholders so that they can work with freedom to innovate in a responsible way.Beside the five strategies, they have several goals on the market.1. Designed to returnIn PG, they focus the Sustainability efforts on improvements that matter, to make the most meaningful impact they can.2. Purposes, values principlesPGs Purpose, Values Principles formulated their shared mint, a common sets of behavior and their beliefs about the business and its potential.3.3 Marketing strategyMany people think that multi-brand strategy will result in a situation that internal competition happens, but P G believes 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 develop advanced products to share the market. As their challenge themselves and overcome their own, so that their productsbrands may occupy a different market, in bless t o consolidate its drawship position.1. Differentiated brandsIf P Gs multi-brand strategy to be understood as simply more brands, it would be wrong. Actually the pursuit of similar products, the differences 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 astonishment. The words above are supported by Piero Morosini (2005)2. Manufacture of USPAccording to the report, USP means unique selling proposition. It is proposed by the American advertising guru Rosser Reeves (said Brent Green 2006). Marketing theory the core of its contentedness Advertising should be according to the characteristics unique to the consumer for rhetoric,and allow consumers to believe that this feature is not procurable to others or others not mentioned. These features can bring tangi ble benefits to consumers.3. Unique way numbers brands in one organizationAs Michel Philippart (2005) and Hangzhou da Xues (1994) study, multi-brand strategy is very difficult to succeed. While a single image of the brand extension strategy to facilitate the unity of management, reduce marketing costs, 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 mind-set 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 sent to Susan E. Arnold, who has been promoted from vice chair of PGs beauty and health department to the position of president of global business units. The beauty care section is also managed by Susan Arnold. PG has restructured its hierarchy of top executives, who i nclude Arnold, in order to meet the ever-changing needs of their larger, more flexible and unwaveringer-paced global business. Lafley, who is the chairman of PG, proclaimed that PG has nearly doubled its business since 2000 with the acquisitions of the Clairol, Wella hair care businesses and Gillette. The win over 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 manner many other multinational enterprises. A variety of products were identified to match national differences and preferences. Consequently, a portfolio, consisting of subsidiaries, run by country general managers was established. However, this management structure may result in two basic problems. Firstly, the cost of operating these subsidiaries is high, and second the ferocious autonomy of national subsidia ries prevented the global roll out of new products and technology improvements (Lin, 2008 9). Therefore, PG needed innovation in the subsidiaries management structure. It concluded that the matrix structure, in which subordinates report to more than one superior (MacKenzie, 200222), is a better alternative for PG, as it allows authority to be kept at lower levels. However, most slosheds would have some difficulty implementing this Matrix structure into their organization because it is difficult to organize multinational activities through this complex structure. For example, dual reporting can lead to disagreements and confusion and a possible overlap of responsibilities. This may result in a loss of accountability and wastes time. Through time PG has been trying to optimize its structure. The current structure resulted in a culture within PG, which was viewed as loath, conformist and risk-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 unruffled a titan 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 particular(prenominal) areas. As a result, the company has become more flexible to change within market competitions and the different abideation of PG.The final stage of completing the innovation process of management structure is to transubstantiate 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 an d 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 corporate structure has been mainly dependent on worldwide subsidiaries and merging. During this time of restructuring, PG has continued 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. sanctions. PG has altered its geographical management structure gradually. As a result, PG has divided its operations into United States and other countries, which mainly inclu des four regions North America, Latin America, Asia and Europe/Middle East/Africa.PG announced a new restructuring initiative in September 1998. A key factor of this restructuring was a shift from an organization centered around the four geographic regions to one centered on seven global business parts based on product lines Baby Care, Beauty Care, material Home Care, female Protection, Food Beverage, Health Care Corporate New Ventures and Tissues Towels. PG has continued to restructure and adapt to different markets and different financial situation worldwide. According to a firm press release announcing the new structure, This change will drive greater innovation and speed by centering strategy and profit responsibility globally on brands, rather than on geographies5. PGs CultureCulture plays an measurable 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 b asic assumption that the group learned as it solved its problem of external adaptation and integration that has work well enough to be considered valid and at that placefore 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 purpose unconscious. Schein considers culture to the three layer phenomenon.From figure 1 it is clearly seen that the organizational culture comprises of three layers first one is the artefacts, espoused values and underlying assumption.ArtefactsInnovation culture is the mission statement of Procter and gamble organization in which they state that the consumer is political boss, 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 diaper have made a small part of your life a little bit better then PG made a difference. PG policies made the company a unique one that respect of governments and law, respects in workplace 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 system in lots of work places around the world. Executive offices do not have doors. Leaders do not have a secretary cordoning them off. The executive floors on all the offices at Procter and gamble are open, conference room is an open round space. They made it round as a small symbol of the new approach (Lafely .A, 2000 CEO of PG).Espoused valuesPG is having hierarchy of company ethics principles. PVP(Purpose, Values and principles), corporate policies, worldwide business conduct standards, operating policies/procedure/practices. For over one hundred seventy years PG purpose values and principles has been guiding the way they do business and it is shown in th e 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 built 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 multifaceted 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 easi er 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 succeeded 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, leadinghip, ownership, passion for winning and trust are the main asset values of PG. By considering purpose and values they made their principles like the show respects for individual, interest of the company and individual are indivisible 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, taken for granted beliefs, perception, thoughts and feelings. PG are having problem relati ng to external adaption and internal integration. PG keep refining their products, launch model from ideas, to prototype, to development, to qualification and to commercialization. Applying this sequential practice on large plateful 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 training/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 leadershipInnova tive 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, assay 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 identified the main operations in business management- technical, commercial, financial, security, accounting and administration. The administration function he nevertheless subdivided into organizational, coordi nating, 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 innovative 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 debunk 1 began as a triangle process, Resources, and strategy the result of a 1990s Cooper-Kleinschmidt study of innovation across a Broad range of businesses.4 Procter Gambles management in the 1990s after transformed the triangle into their Initiatives Diamond, shown in Exhibit 2.iiThe Innovation Diamond is a guiding framework to help management focus on whats important to success innovative strategy, a good idea-to-launch process, portfolio management, the climate and leadership.PGs Initiatives Diamond serves as a guide f or 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 played a significant role in improve 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 half of PGs diamond in Exhibit 2 is strategic in nature, and captures the businesss product innovation strategy goals, the mix of new products required to meet those goals, and the required resources. Portfolio management (or project selection) is thus fast connected to strategy. The bottom half of the diamond is more operational and focuses on deliver ing specific new product projects or initiatives what resources must 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 focusing on effective innovative Management.Peter F. Drucker says Leadership is the lifting of mans thinking to higher sights, the increment of mans performance to higher standard, the building of mans personality beyond its commonplace 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 approach 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 enduring thing PG leaders can do is to identify develop our next gen eration 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. scattering of work, delegation of authority and supervision of work should be done meticulously.There are various 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 entirely 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 tow ards the work. PG leaders are not born leaders at first they are just 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 make grow process led by the CEO the senior leadership team. 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 innovation method. Thus PG uses the two dimensional style. (Blake Mouton 1964)According to the Likerts there are four leadership systemsExploitative AutocraticBenevolent authoritativeParticipativeDemocraticDemocratic leaders have complete confidence and trust in their subordinates, t hey 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 treat 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. to a lower place is the example of how the innovative product is developed under the innovative leadership of PG, which shows some relat ionship 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 thrifty 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 parents 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 note 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 careful 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 structure s 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 very much 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. Competition 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 regr et if prediction is wrong. Various differences of brands among PG could be helpful and hard-nosed 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.