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Contemporary Management Practice: Procter & Gamble - Essay Example

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The researcher of this descriptive essay mostly focuses on the discussion of the topic of contemporary management practice and analyzing the issue of management in Procter & Gamble. The author analyses deeply organisational structure and change management theory…
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Contemporary Management Practice: Procter & Gamble
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Download file to see previous pages Inter-firm competition, product cannibalisation and a lack of adherence the organisation’s super-ordinate goals led to a severe erosion of market share in the 1970s. It was only in 1980 that John Smale, P & G’s chairman, stepped in to stem the rot and restructured the corporation. A new, category management system was put in place to co-ordinate the efforts of the brand managers. A fair degree of authority was delegated by the top management to the category managers which ensued greater co-ordination and quicker decision-making. International divisions were given more autonomy and flexibility. Newer work processes, work systems were put in place and communication across different countries improved. The category manager acted as a profit centre and fewer layers separated the top of the pyramid from the market. This restructuring exercise was a success. P & G management felt that though the new matrix structure may not be ideal, it was definitely suitable. It fitted P&G’s culture, supported its strategy and was flexible enough to adapt to the environment. 2. Organisation structure and change theory There are four major approaches to organisation, structure and management. They are: 1. Classical approach 2. Human relations approach 3. Systems approach, and 4. Contingency approach. The Classical approach (Taylor 1917) emphasised on purpose, formal structure, hierarchy, technical requirements and common principles of organisation. The Scientific management approach of Taylor advocated bureaucracy which was based on the principles of specialisation, hierarchy of authority, system of rules and impersonality. The human relations approach (Barnard 1968) drew attention to social factors at work, groups, leadership, the informal organisation and the behaviour of people....
The author of the essay "Contemporary Management Practice" assumes that P & G, presently, is a successful multi business organisation with a wide range of businesses and products. After almost forty years of success and prosperity, it had to concede considerable market share due to organisational and environmental problems.
The restructuring exercise in 1980 has turned around the organisation and set it on a path of success. However, to sustain its prosperity, it needs to change more and the clustering organisational structure model, would be highly appropriate. This model necessitates in a radical shift in the top management corporate culture. But, considering the future plans, P & G would be best served by this model.
In the end of the paper the author gives his recommendations. He assumes that it is highly recommended that P & G embraces the clustering model of organisational structure. P & G has already adopted loose-tight, decentralised bureaucracy in the past. Recent changes in the form of the new matrix structure have been fairly substantial. Therefore, P & G top management must go the whole hog and take up the clustering model, with all seriousness. P & G must realise that unless this is done, it will not be able to command a dominant presence in the market and it may be forced to accept large scale changes in the future. The clustering model, as a follow-up to the new matrix structure, will definitely work wonders for the long term success and prosperity of P & G. ...Download file to see next pagesRead More
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