Analysis Of P & G Us

910 Words Jan 23rd, 2016 4 Pages
In the 1950s, P&G US was organized by product (Diagram 1)
• Advantages of organizing by product are: o Faster decision making on the products o Decision making can be effectively done by Brand managers instead of escalating it to executives o Product development & life cycle can be improved o Faster product modifications based on the customer response o Performance of each divisional products are can be evaluated easily based on the income statements. As each product division is independent, we can easily close a division which is not profitable without any impact on the entire organization.
• Disadvantages of organizing by product are: o As each product division run independently, high chances of misalignment between the corporate goals and product division goals o Difficulty in moving a successful product to High volume production as each product division has limited resources o High operating expenses due to duplication of functional departments for each product division (example: IT, finance, and human resources)
• Value of P&L responsibility being given to Brand Managers: o Brand Managers have to align the Corporate strategy to their division strategy o This organizational structure clearly differentiates the financial performance of each brand division. This make people competitive, innovative and try to focus more on their brands.
• Problems I think this would cause are: o Each division is focused only on products and its scaling without understanding the…

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