Procter & Gamble: Organization 2005 (A) [Piskorski & Spadini, 2007]
September 25, 2012
Case Discussion Questions
These questions are mainly for class discussion. However, they will also be quite helpful in preparing for the quiz. The possible essay questions for the exam have already been sent in the guidelines for the first exam.
U.S. Divisional Structure in 1955 (Diagram 1) 1. What are the benefits of organizing by product rather than function? By using the product strategy brand managers in the same product division competed in the marketplace but shared access to strong divisional functions. Those transferred best practices and talent across many brands foresting leading edge competencies in the R&D, …show more content…
What are the reasons for P&G to have adopted a structure different from the one shown in Diagram 1? Marketing resources are being wasted on internal competition with each brand manager competing with same group of consumers. (-cannibalization) 7. What is the category-level manufacturing director able to do now that would not have been previously possible in Diagram 1? How much authority does he/she have? More authority in terms of sales, manufacturing, finance, R&D, Product development functions when compared to Brand management. Also Category Manager is a decision maker who is responsible for the entire firm’s product line whereas BM acts as independent decision maker and independent entrepreneur within the same firm.
Improves functional strength
Growth of VP
European Category Management in the early 1980s (Diagram 4) Hybrid structure 8. How is this structure different from the structure shown in Diagram 3? To promote cross border cooperation across functions and to shift focus from country management to product category management. Restructured around product categories. Country GM’s were replaced with multiple-country product category GM’s who reported to the division VP’s. 9. What are the reasons for P&G to have adopted a structure different from the one shown in Diagram 3? The model was not effective. Unstandardized and subscale manufacturing operations in each country were expensive and
Please use this template to answer the questions below in essay format. The minimum word count for the three questions of Part 1 is 300 words total (or 100 words per question). A reference citation is required.
Is the present structure consistent with current corporate objectives, strategies, policies, and programs, as well as with the firm's international operations?
Structure is the basis through which an organization seeks to create control the direction of an organization. This is completed through clear definitions of the allocation of work, differentiation, and the coordination of having those responsibilities working together towards the efforts of the organization, integration (Bolman & Deal, 1993, pp). Through these methods, the organization is able to devise a division of labor that collaborates to bring about the missions and goals of an organization. The structure that comes about from this can be varied in their rigidness and flexibility it allows, and to an extent this is a great contribution to its success.
This structure is unlike that of the Philips where locals, within the national organizations, held senior management positions. Basically, the structure gave some leeway to product control but still kept the same global image of Matsushita. As times/cultures changed, the strategy that existed with Matsushita during the early years proved to be the foundation of a successful company.
You are to answer the following questions in your own words. Please post the questions with your answers in the text box below to submit your work. Remember to use complete sentences, use proper grammar, and don't forget to proofread and spell check your work before submitting it. This may require additional internet research, so be sure to cite your sources.
1.Why did the US organizational structure shift from product grouping in the 1950s to a matrix in the 1980s? Why did the European organizational structure shift from geographic grouping in the 1950s to category management in the 1980s? Why were the two structures integrated into a global cube in the 1990s?
P&G set up the newly reorganized global operations. I’m going to explain how the company works with its new global operations strategy and how P&G could push SK-II to world brand by using P&G’s target market – China, Europe, and Japan. By using the implement of Organization 2005 (O2005), the company is expected to have more annual growth rate together with less expense. P&G gives more compensation along with more responsibility tasks. P&G allows every employee in company to hold firm’s stock. P&G transferred primary profit responsibility from P&G four regional organizations to seven global business units.
It did so in order to better focus its resources on changing customer needs as well as emphasize its strengths in the market place. The organizational structure now consists of centralized engineering and marketing organizations. This way the company has the ability to prevent product and resource overlaps and more effectively allocate its resources to areas yielding optimum profitability. The engineering side has eleven technology groups with people heading multiple groups and reporting to one person who then reports to the CEO. The marketing side has one head who reports to the CEO as well.
A global product group structure is a variant organizational structure which has product groups along a vertical axis and foreign (overseas) divisions, or business units, on a horizontal axis. The primary purpose of the product group structure is:
With direct-connect structure, the business leaders or functional managers of specific business divisions report to their headquarters in the U.S.. After the direct-connect structure is implemented, it has changed the operation in GE Canada. In the past, the Canadian CEO was fully responsible for the profitability of the Canadian operating division, with the manufacturing plants made a full line of products primarily for the Canadian market with some exporting possibilities. After the new management system implemented, the U.S. divisional bosses is responsible for the profitability of each operational business division both in the U.S. and Canada. With the change in management system, the business development group has changed its position in GE Canada by switching the role of conducting feasibility studies and new market development for the business unit in Canada to the role of looking for opportunities to leverage the strengths of Canadian activities on a global basis. The business development group felt that the change in management system has made the U.S.-based business leaders to ignore the potential business opportunity in Canada and added more uncertainty to the business development group role. Most decisions need approval from the U.S. divisional bosses, whom do not have a complete picture of the business potential in Canada and want full control of the business operations