Procter and GambleSynapsis:Procter and Gamble has been available for hundred and seventy years with its shared beliefs in management norms; hiring only good people of high character, treating them as individuals with individual talents and life goals, and providing work environment that encourages and rewards individual achievements. Procter and Gamble's broad and accumulated industry experience and business knowledge has been formalized and institutionalized as management principles and policies. Procter and Gamble accomplishes its basic policy of providing superior value and meeting basic consumer needs could be accomplished by strong commitment in research to create better products than competitors' and provide continual product development, extensive product and market testing, and close tracking of consumer needs and preferences.
While P&G started to expand to Europe, the importance of tailoring products to meet consumer demands differing in each nation according to different consumer needs and preferences, and the critique of management of new foreign subsidiaries were realized as the issues which arose with the globalization. Therefore, strong national subsidiaries were set up with their own brand management structure, product development capability, advertising agencies, and manufacturing capability. The individual approach to management of each subsidiary with problems such as cost increases, profits decreases created the idea of the vitality of standardization of products Europe-wide by providing involvement and cooperation of the subsidiaries. Dealing with the structures and management of subsidiaries, the strategic questions about Vizir's launching rose critical questions about the existing organization structure and internal decision making processes. The issues about standardization of products Europe-wide and effective team structure for this standardization process of the company's new heavy-duty liquid (HDL) were waiting immediate and efficient decisions.
Case Notes:1. Procter and Gamble's strategy to attract people who were willing to spend their entire careers with the company is a great way to retain the intellectual capital within the company.
2.Procter and Gamble's promotion system choosing top management from career P&G people rather than from outside the company is a very effective way to motivate people and to get their commitment to goals.
3.P&G's brand manager structure restricts lateral communication therefore blocks widely and effectively usage of knowledge management and best practices.
4.Although P&G's formalized and institutionalized management principles and policies seems time consuming, that is the best way of minimizing the risk in the very risky and expensive consumer marketing business, and providing effective circulation system through the organization.
5.Different consumer needs and preferences limited customization of P&G's products. Therefore, the need of continual research and development increased the costs for P&G.
6.Replication of management policies and practices is transplanting the Corporate DNA. P&G should transplant its DNA since they are very crucial for company's success.
7.When market is mature, differentiation becomes more critical than before. While market growth slows, competitive pressures increase. P&G's policy for continual product development and creating better products than competitors' was a great way to get the competitive advantage. But also cost cutting in order to reduce prices is crucial at this stage. P&G needed to accomplish this by maximum standardization to reduce costs.
8.New system to standardization in R&D encouraged the best practices.
9.New system to standardization in marketing was less successful. This created the need of local subsidiary level on day-to-day management.
10.Cognitive diversity was a crucial issue of subsidiaries since they were working with diverse culture, diverse subsidiaries, and diverse...
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