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Advantages And Disadvantages Of P & G

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Organization is defined as a deliberate arrangement of people to accomplish some specific purpose. Many large organizations such as P&G basically will use several type of departmentalization. Based on the P&G organizational chart, the types of departmentalization which implement by the P&G is product departmentalization and geographical departmentalization. 8.1 Product Departmentalization Product departmentalization defines as organizes employees based on which product line or set of services they work with. According to Lawrence Gitman, Carl McDaniel ( 2007), product departmentalization is based on the services and goods produced and sold by the organization unit. Company with multiple products commonly will use the product …show more content…

P&G hires the local employees to manage the business and decision makings are tailored to the unique country characteristics. Local employees understand exactly what drives local customer purchase behavior. It will make the company more effective and efficient in handling the specific regional issues that facing by the company. Organization can obtain economic benefits from local operation because business operation can use local resources to run their business. As the result, transportation cost that use to moving product or selling the product to customer can be …show more content…

By using this type of departmentalization, P&G have to hire many workers to take position in different areas. Geographical departmentalization also involves higher cost in operation and control due to the duplication of activities in different area divisions. These will increase the operation cost of the company, and influence profit of company. Besides, the relation between other organizational areas may not be very smooth because each organizational areas are only focus to each area. Employees may more focus on local organization’s goal and neglect the entire company’s mission and vision. All of these will affect the profitability and culture of

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