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Exploring Corporate Strategy of Procter & Gamble - Case Study Example

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This paper “Exploring Corporate Strategy of Procter & Gamble” is about Contemporary management practice and more specifically on organizational structure and change management at P & G. After focusing solely on the soap for the first century, P&G expanded into chemical processing…
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Exploring Corporate Strategy of Procter & Gamble
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Download file to see previous pages The decentralized bureaucracy framework led to the entire strategic decision making at the top in the Cincinnati Head Office while the Brand Managers were responsible for operational decisions. P & G’s strategic orientation necessitated it to be innovative and responsive to the environment.  However, the matrix structure was unable to achieve the right balance and decision making power was skewed towards top management.  This high degree of centralization was at crossroads with its growth strategy and responsiveness needs. Brand managers suffered from lack of formal authority vis-à-vis their responsibilities which dented their responses to product problems and environmental changes.  It also added to conflict and frustration. The distribution channels had greater bargaining power and customers were less brand-loyal. Inter-firm competition, product cannibalization and a lack of adherence to the organization’s super-ordinate goals led to 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 coordinate the efforts of the brand managers.  A fair degree of authority was delegated by the top management to the category managers which ensured greater coordination 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 center and fewer layers separated the top of the pyramid from the market. ...Download file to see next pagesRead More
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