Organizational Behavior - Report Example

Proctor & Gamble (P&G) was founded in 1837 by its founders – William Proctor – a candle maker from England and James Gamble – a soap maker from Ireland. These two promoters emigrated to American and created what is one the leading consumer goods company. P&G today employs over 138,000 people in over 80 countries. P&G brands are platforms for innovation (P&G, 2008). Some of the most reputed and trusted brands of P&G include Pampers, Oral-B, Ariel, Always, Pantene, Mach3, Herbal Essences, Pringles, Lenor, Iams, Duracell, Olay, Head & Shoulders, Wella, Gillette, and Braun. P&G has a unique organizational structure that draws upon the advantages of both our global and business units (P&G, 2008). Their four pillars of strength include: The global business units (GBU) that build major global brand with robust business strategies. The local Market Development Organizations (MDO) that build local understanding as a foundation for marketing campaigns. The Global Business Services (GBS) Organization to provide the business technology and services. The Corporate functions (CF) work to maintain the company’s place as a leader of our industries. The core philosophy of the organization is hence to Think Globally (GBU) and Act Locally (MDO). Both inside and between the four pillars, P&G relies on team work to get the best results against a stated objective. Under the GBU they have different departments – Beauty & Health, Household care and Gillette GBU. Under each GBU there are several reportable segments and again several brands under each segment. The heads of the three GBUs and Global Operations each report to the Chief Executive Officer. Each business unit focuses on its individual consumers, customers and competitors while capturing the capability, knowledge and scale of a $70bn global company (Annual Report, 2006). They have created the capability to collaborate, learn quickly and reapply success across P&G businesses. P&G has gone through the phases of trials and tribulations in team development, delegation and organizational socialization before reaching the current position of an agile and flexible organization. Gustafson and Kleiner (1994) define a team as a small group of people who do similar work, meet regularly to identify and analyse causes of problems, recommend their solution to the management, and where possible implement the solutions. Team participation pools in the ideas and the employees take responsibility for quality and productivity. They manage their work, develop their skills and knowledge about the organization and about themselves. This resulted in better decisions and support for the organization as a whole. Effective use of teams can bring significant improvement in productivity, creativity and employee satisfaction (Castka, Bamber, Sharp & Belohoubek, 2001). Teams can bring together skills and experience that far exceeds those of any individual. In today’s fast changing work environment delegation has become essential. Delegation is a way to empower the staff and if delegated the right way, the staff acquire new skills to be more productive. It also instills a sense of self-reliance and improves morale. It provides oppurtunities for growth and development. Empowering employees means to give them the resources, responsibility, authority to plan, organize, implement, measure their work and make decision for them that are necessary to maximize their contribution towards the growth of the organization (Ahmad & Karia, 2001). The organizational culture has to be transmitted to the new members. They have to be made to feel a part of the organization and this process is known as organizational socialization. This is especially important in organizations with strong cultures (Field, 2002). Organizational socialization (OS) has a lasting impact on employees’ behaviors, attitudes and commitment to their organizations (Kwesiga & Bell. 2004). The OS process can make or break a career. The speed of the socialization process determines the employees’ loyalty, commitment, productivity and turnover. P&G started to experiment with teams in 1970s but apparently did not achieve success because their first report was available in mid-1980s (Gustafson & Kleiner, 1994). It was found that their team plants were 30-40 percent more productive than their non-team plants. P&G had a high-walled organization structure that isolated and insulated the technical development carried out at each subsidiary’s lab (Bartlett & Ghoshal, 2003). The new R&D head decided to break down some walls and formed European technical teams. He invited like-minded experts from various countries who could exchange information and build informal communication networks. In each research centre people had been carrying the attitude of “not invented here”. Changes helped to build a technical team that had built relationship among its members so that it formed a close-knit network of intelligence and product expertise. The team discovered how the new liquid detergent developed by the Brussels-based team would have to be modified to suit the local market situations in different countries. The company could involve and pool the knowledge and expertise of brand managers from seven subsidiaries and launch a marketing strategy. They were thus able to respond to the needs of different European countries while Colgate-Palmolive had to with draw its liquid detergent brand. The company converted its far-flung sensing and responses into an integrated learning organization. They scanned for new developments, introduced cross-pollination and best practice, and championed innovations with transnational applications. As a team they could create an organization that could launch better new products at a rapid pace round the world. P&G has a management style that is participatory, delegating and empowering. The decision making process is decentralized and the middle management does not have to wait for headquarters approval and funding in order to embark on key projects (Gunu, 2008). This makes it easier for the management to customize products and customer services internally. This proves that the success of the organization is linked to its management and leadership style. The customer-focused leadership style has helped to strengthen employee morale which in turn has resulted in providing the needs and wants of the customers in this ever changing market. As far as the organizational socialization is concerned, P&G does not follow the golden rule but the platinum rule. They get their diverse groups from all over the world together and have them discuss their socialization. They set up situations where their socializations might be hurtful to someone else in the group. In a homogenous group it might be possible to treat the people the way the management wants but in a diverse group like P&G they treat other people the way they would want to be treated (Goldsmith, 2008). This means they have to know their employees to know how they want to be treated. They follow the ‘people supporting people’ approach as their method of socialization and the managers educate themselves on the local culture of the people whom they want to help. Through this process of socialization they are able to develop in an individual that ambition should be for the organization and not for the individual himself. Their current structure is very agile, flexible and responsive and this has enabled them to advance their sales. Organization structure can be a liability for large diversified multinational companies but by linking the structure tightly with strategies and strengths, they have been able to make their organization design and the supporting business system enablers of sustainable growth. They delegate responsibility and empower their people in to taking decisions. Their process of socialization too is unique as the managers concerned educate themselves with the culture and nuances of the country from which the new recruits come. They are thus able to take care of the diversity in their workforce. These are the factors that have been responsible for the success of Proctor & gamble. References: Ahmad, ZA & Karia, N 2001, QUALITY PRACTICES THAT PAY: EMPOWERMENT AND TEAMWORK , retrieved online 22 January 2009, from http://mgv.mim.edu.my/MMR/0012/001209.htm Annual Report, 2006, P&G 2006 Annual Report, retrieved online 22 January 2009, from http://www.fr.pg.com/download/rapport_annuel_2006.pdf Bartlett, CA & Ghoshal, S 2003, What Is a Global Manager?, retrieved online 21 Januray 2009, from http://www.business.uiuc.edu/aguilera/Teaching/Bartlett%20Ghoshal%20What%20is%20a%20global%20manager%202003.pdf Castka, P Bamber, C J Sharp, J & Belohoubek, P 2001, Factors affecting successful implementation of high performance teams, Team Performance Management, vol. 7, no. 7/8 pp. 123-134 Field, R 2002, Culture and Socialization, retrieved online 22 January 2009, from http://www.business.ualberta.ca/rfield/Culture%20and%20Socialization.htm Goldsmith, A 2008, Executive Spotlight: Bob McDonald - P&Gs Chief Operating Officer, The Monroe Street Journal, retrieved online 22 January 2009, from http://media.www.themsj.com/media/storage/paper207/news/2008/10/06/Features/Executive.Spotlight.Bob.Mcdonald.Pgs.Chief.Operating.Officer-3472259.shtml Gunu, OM 2008, How Procter and Gamble Survived Through Innovation – A Case Study, KNOL, retrieved online 22 January 2009, from http://knol.google.com/k/osman-masahudu-gunu/how-procter-and-gamble-survived-through/1kietb77pgwru/8?domain=knol.google.com&locale=en# Gustafson, K & Kleiner, BH 1994, New Developments in Team Building Work Study, vol. 43, no. 8, pp. 16-19 Kwesiga, E & Bell. MP 2004, Back to Organizational Socialization: Building a Case for the Advancement of Women in Organizations, Equal Opportunities International, vol. 23, no. 7/8 P&G, 2008, Corporate Info Structure, retrieved online 22 January 2009, from http://www.pg.com/jobs/corporate_structure/four_pillars.shtml Read More