The Business, Government and Society Relationship of P&G

Topics: Stakeholder, Corporate social responsibility, Business ethics Pages: 11 (3204 words) Published: November 4, 2008
1. The Stakeholder Model Theory6
2. P&G’s Stakeholder Model8
2.1 Sustainable Development psychology8
2.2 Economic Development9
2.3 Environmental Protection10
2.4 Government Relationship10
2.5 Caring for Community11
2.6 Consumer11
2.7 Business Partner12
2.8 Employee12
2.9 Industry Associations12
2.10 NGOs13
2.11 News Media13
3. Summary and Conclusion14



Stakeholder model is important for a successful company that pursues sustainable development. Most of the companies do not know how to implement the stakeholder model even though they have described the different aspects of the stakeholder model. Procter & Gamble (P&G) is a leading and remarkable company that has an integrated stakeholder model. Though researching the theory of stakeholder model and the experience of P&G, this article reveals the factors of P&G’s stakeholder model that includes Consumers, shareholder, new media, business partners, industry associations, government, and NGOs. It also reveals how P&G implements the model according to the sustainable development psychology and by using different new technologies and marketing methods.



The government and society are more and more important in business. The corporations could not just develop depending on the sociopolitical and market environment or on the powerful political force. Many companies begin to develop a stakeholder model which can balance the relationship among business, government and the society.

According to the theory of stakeholder model described by Steiner/Steiner, stakeholder is an entity that is benefited or burdened by the actions of a corporation or whose actions may benefit or burden the corporation. The primary stakeholders include stockholders, customers, employees, communities and governments. The secondary stakeholders include earth’s biosphere, religious groups, political parties, unions, creditors, political interest groups, trade associations, suppliers, competitors, media, educational institutions, future generations and the poor.

However, the goal of the company is to pursue the maximal stock price. It is difficult and unrealistic to take care of all the aspects of the stakeholders for most of the corporations, because the cost of government relationship and responsibility of society will weaken their positions in the industries and decrease the profit largely.

Procter & Gamble is the leading company in fast moving consumer goods industry in the world. In 2007, P&G was appraised as the 25th largest US company by revenue, the 18th largest by profit, and 10th in Fortune's Most Admired Companies list. Intelligently, P&G builds a stakeholder model according to the company’s purpose and the sustainable development psychology. As a result, the increasing responsibility does not decrease the profit. In contrast, the model increases the value of P&G, discovers the unsatisfied demand, improves the product, gets the support from government of different countries, and gains the reputation from consumers, business partners, industry associations and the society.

This article concludes the stakeholder model theory and analyzes the Sustainable Development goals of P&G according to the stakeholder model.


Stakeholder model is a useful but expensive method to deal with the government and the society. As a new theory, many companies have failed to implement it. Researching a company that can successfully implement the model is necessary and valuable. P&G is a company that can gain profit by using the stakeholder model. Through analyzing the sustainable development strategy of P&G by the stakeholder model theory, this article concludes different aspects of stakeholder of P&G, and reveals how P&G implements the...

References: , European Journal of Marketing. Bradford, 2005, pg. 956
Structures, Journal of Business Ethics, 2005
3.P&G, Dow Jones Sustainability Sector Leader, 2007
6.Clarkson, Max B E, A stakeholder framework for analyzing and evaluating corpora,
Academy of Management, 1995, pg
7.Procter & Gamble, P&G commits to safe drinking water in Africa, Filtration Industry
Analyst, 2006, pg
8.PR Newswire Europe, UK Government Aid to Procter & Gamble (P&G) Saves Children 's
Lives through Clean Water in Haiti, 2005
9.Access Czech, Procter & Gamble, Detergent Producer, Invests in the Environment, 1996
10.P&G, P&G Launches Improved Shareholder Investment Program; Eliminates
Administrative Fees for Investing in P&G Stock, PR Newswire, 2007
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