Leadership Management in Proctor and Gamble - Essay Example

?Leadership Management Introduction Procter and Gamble, P&G is an international public company that was founded in 1837 by William Procter and James Gamble. The company deals on consumer goods industry, which includes cleaning agents as well as personal care products, the headquarters of the company is in Cincinnati, Ohio U.S., but it distributed in most parts of the world. Away from the cleaning and laundry products, the company is also a manufacturer of certain foods and beverages. From the records of the year 2012, the company was reported to have 126,000 employees and it is traded in the New York Stock Exchange, NYSE where it currently stands at $ 77.67 (Messmer 2008, p.34). In the financial year of 2012, the company recorded sales of $ 83.7 billion, the total equity of the company stands at $ 63.4 billion while the assets are to the tune of $ 132.2 billion. P&G Company changed the structure of their business in 2011 and formed two ‘Global Business Units’ that were further sub divided into ‘Business Segments’. From the new structuring, the company came up with the following segments; Baby care and Family Home Care, Snacks and Pet Care, Grooming, Fabric Care and Home Care, and Beauty Care (Baucus, 2011, p.18). This new structuring was proposed for easier channelling of the products to the market for marketing enhancement purposes, considering the management of P&G and the staff, the board of directors comprise of eleven members that manages the company with the CEO, chairperson and the President of the company being A.G Lafley. The company is one of the 500 fortune companies and was in 2008 considered top one hundred employers in Canada, the Company is also a member of the U.S. Global Leadership Coalition (Watt 1998, p.13), this company operates in most of the continents including manufacturing operations are based in Africa, China among others (Canedy 2012, p.17). Company’s Analysis As indicated in the introductory part, P&G also is an American multinational company spread in many countries including UK. As such, the company faces several challenges that it has to handle and this needs leadership management for efficient delivery of the required solution (Penford 2005, p.22). There are many challenges facing businesses all over the world and there has to be a strong leadership management at the helm, a leadership that is result oriented comes and can navigate the challenges fort the business keep track in the right direction of productivity. Considering this, analyses is done for P&G Company in the United Kingdom to understand the key challenges confronting the business, the model that has been used in this case is PEST analysis (Vinwood 2001, p.19). PEST model is a useful tool that is mostly engaged to understand the market growth or decline that may be experienced by a company, in this regard, the analysis that is accrued from PEST can be conveniently used to project on critical factors in an organization like potential, direction as well as the position. It is thus important to do a PEST analysis of a company occasionally to understand the critical factors that may be bedevilling its performance (Hardesty, 2008). Political Factors As it is known that P&G Company mainly deals on the personal cleaning and laundry products as their mainstream products, there are several political challenges that have been found to be affecting the company in UK. The indigenous companies in the country like Hospec Company are favoured by the tax legislations enacted in the country; this is away from the funding and grant given to the companies by the government. The taxation policies given to P&G are making their products very high not to favourably compete with the domestic products in the country in terms of costs (Crick 2012, p.21). In this regard, one of the challenges facing the company in UK is balancing the cost of their products so that they can be the same with the indigenous products; the Company has to balance this for adequate competition with other local companies in the UK. If the company cannot harmonize the cost of their products, they will not be able to make a serious cut in the market based on the relatively lower prices of the domestic products courtesy of the UK taxation policy on local industry. Economic Reasons With reference to the Economic factors, there are no major challenges that the company if facing for now, the exchange rate between the home country, US, and the investment country, UK is stable and there are no challenges posed in this relation. There are also adequate markets in UK that can be explored and tapped given that the company is not dealing on those products that are affected by whether (Dalton 2012, p.15). There are also established market routes hence elaborate distribution trend that the company can explore to ensure that their products reaches most parts of the country regularly and that they are always availed to the final consumers. Social Factors Under the social factors, the company faces a major challenge in the sense that they are not so sure which brand they are supposed to retain in the market. Given that the company is in a dilemma to reach a resolution on the best brand to retain, it follows then that they are not sure about customer satisfaction in the market by their products. As is the case with marketing in a crowded market with competitors, a business has to be sure about the brands that are popular with their customers and makes improvements on it. If this is not known, it becomes a problem for the company to understand the market trend for their products; therefore, it will be challenged by the competitors in most of the times (Davidson 2010, p.18). Technological Problems Following the PEST analysis, it was realized that P&G is facing a serious problem in innovation, and that there has been continuous pressure for the company to catch up with some of the companies that has flooded the market with the contemporary innovations and are swaying the customers to their sides. It was realized that the company has been using their old-fashion products and there has been little improvement, unlike the competitors that are driven by a strong sense of innovation every time (Dickson 2011, p.19). SWOT Analysis SWOT is another model that was applied for analysis in the company to identify the following; Strengths, Weaknesses, Opportunities and Threats as they presents themselves for the company. In reference to Strengths, the company has several attributes that gives it a good footing in UK and though which they can explore to take their rightful position in the country. P&G give customers a wide choice of brands that ranges to about three hundred different brands with a strong team of employees sourced from all over the world (Duke 2012, p.26). The company has also devised an excellent marketing and advertisement strategies that are used to advance marketing for their products, they also sponsors several activities including and entertainment events that gives them a head start in marketing their products. Under the consideration of weaknesses, the company has failed to brand their products in such a way that counterfeit products will not be sold under their disguise, the company realizes substantial loss under these foul play by those who sells fake goods as their products. Moreover, the company is facing fierce competition from the domestic producers and other international brands that also plays in the same market. Despite the weaknesses, the company also has the potential in many opportunities that remains open to it such as, tapping the dormant market in the rural areas and increasing their presence in the urban areas (Grant 2012, p.14). They also have the option of considering mergers and acquisitions for strengthening their products brand; they can also increase the purchasing power of the prospective consumers of their products to increase the demand for their products. The opportunities available are also faced with a number of threats in the company, there is a cutthroat competition for those products that are produced by the local industries in UK, and this is because most at times, the government subsidizes them. They retail lower in the market than those of P&G that faces heavy taxation thus increasing their retiling prices, there is also intense competition emanating from the FMCG companies as well as FDI (Hasell 2011, p.27). The most important challenges facing the company is there inability to be innovative with their products, they are also in a dilemma to determine the cost of their products for favourable competition with the competitors in the market. The brand that should be taken to the market is also giving the company some trouble; this has made them unaware of the level of customer’s satisfaction. Sales remain the most important business goal and it can only be achieved if the products appeals to the customers and satisfies their varied choice and preferences. Thus, it is essential and urgent that the company tries to catch up with this challenge if they have to survive in the innovative UK market (Heller 2013, p.31). The most important challenge facing the company is innovation; the company has to bring into the market brands that are compliance to the needs of the customers since if this is not met, there will be significant fall in sales that can eventually make the company to realize substantial decline in sales. The company is obliged to respond to this challenge with speed, marketing of a product is dependent on very many factors, but those that are emerging from the customers are most satisfied first, more so in a competitive market that P&G Company finds itself (Jackson 2010, p.26). Without bridging this gap, the company risks losing most of their hard-earned loyal customers, most of the customers expect the best brands; this will force the company to be innovative in order to satisfy their customers otherwise their established market base will go down. Plan for the Challenges Facing P&G in UK Now that the company has realized the challenges they are facing after PEST and SWOT analysis, it is important that they device those strategies that will make them mitigate on their consequences in the company (Habbert, 2003). In looking for the mitigation measures, there need to be a structured program to pursue so that amicable solution can be ultimately realized. For a lasting solution to the challenges, the following areas are important for consideration; Factors Exacerbating the Problem Having identified that the company is not innovative on their brands and that it is priority number one challenge to be dealt with; therefore, it is important to consider other factors that are aggravating the challenge and compounding it. This is particularly important because giving control through corrective measures is equally important in the process of finding a solution to the challenges. In the analysis of the company, it was realized that there is no research that has been done by the company to understand the revolution that is currently shaping the market’s choice and preference, in that doing, the company has remained steps back in moving with the demands of the customers (Jensen 2012, p.33). Unlike other companies, P&G has not had any task force that is charged with the responsibility of doing research into possible brands and testing them in the market, the innovative part of the company has been very poor, and there have not been any deliberate efforts to develop a new brand that can be taken to the market. This is particularly not commendable given that their competitors have heavily invested in this, and that explains their decline in sales in the recent past (Jill and Lynn 2012, p.23); therefore, the company has remained ignorant of the marketing trends that are taking place through the competitors. The Role that should be played by the Organization In this case, the organization has two option, they need to have a short time measure and a long time measure that will be helpful to the organization in future. Firstly, the company should do a market research, this is an investment that should not be avoided by the company because thorough it, they will be able to realize the trends that are shaping the market, the brand that are required by the customers and the comments of the customers on their products (Bonello 2010, p.4). They will also get to learn more about the competitors in the market and use this privileged information to make a comeback through compliance to the information collected (Karen 2010, p.12). This strategy will help the company to position itself in the prospectus path because they will be able to be worthy competitors in the same market domain. The company should also consider investing in continuous innovative research on brands; this will enable them to be always ahead of other companies in availing options for the customers (South American Business Information, 2012). How the Company will affect the Envisaged Change It is true that the introduction of change in an organization is always met with certain rebellion because most of the employees and the system of management has acclimatized to that which has been there. Notwithstanding, there need to introduce the change, the Marketing department will have to double up in the research for the purpose of reporting the trend in the market, they will have to work with the human resource department that will also double up to encompass those in the innovation (Kimes 2009, p.27). In this regard, it will be most reasonable if the company institutionalize the two areas in the relevant department-the innovative part and the survey team. In introducing this change in the management, role will have to either change or advance for some of the employees and given this scenario, the company can use Lewin’s Change Management Model to introduce this change in the company effectively (Markels 2006, p.23). Obstacles to Change and there Remedies The main obstacle to this change program in reference to P&G Company is inadequacy of the personnel to bring the change process particularly in the area of innovation. Since the company was not having such plans, it may be impossible for the company to respond to the challenge in the shortest time as may be required. This is given by the fact that they will have to scout for the relevant personnel with the required training and experience, this is not easy work, and they should thus work on timelines (Marsh 1999, p.34). As proposed, the company can have a scheduled timeline though which they projects to have the change process accomplished, this will give them the required time to bring the change program in a way that is economical and effective. By giving themselves timelines, we can be sure they will get most of the things in context and have a sustainable program for the company years to come from now. Limitations of the Plan and Measures to overcome them The main limitation of the plan is the period that is required for the change process to take place, the plan does not provide instant solution to the challenge facing the company, and there is fear that their need to give remedy will be overtaken by the competitors in the market if the process takes long (Neff 2010, p.25). In order to overcome this limitation, the company should first track the process of initiating change by using the initiatives from other companies that have been successful in the same area, this will enable them to compress the period through which they can accomplish the need of the company. Evaluation of the Success of the Change Process In every change process that is aimed at bringing a solution to a challenge, it is necessary that an evaluation process be given so that the viability and efficacy of the process be verified in providing the needed change. In this case, therefore, it is important that the company conduct an evaluation process for the change process that they initiated to give a solution to the challenge. In order to know possible change that a proposed plan have or has had in an organization, there is need to use those parameter that can give accurate report on the effectiveness of the plan in bringing change to the organization (Neff 2010, p.24). Regarding evaluation, it is important to know in the first place the negative impact that has been necessitated by the challenge, in P&G Company in the UK, the main problem has been the issue of the brand and customer satisfaction. The laundry and personal effects products that are produced by the company has not been producing brands that satisfies customer’s needs, this has resonated in the number of sales that the company is making in the region and have significantly gone down (Neff 2012, p.31). One of the possible ways through which the company can evaluate the proposed plan therefore is using the indicator of the number of sales made after a period; this should be coupled by the responses and comments from the customers regarding the products after the change process. Just as the company will embark on the marketing research, in which they will be collecting data from various places through sampling to know the reaction of the customers on their products, there should also be an evaluation research (Penny 2013, p.21). They should opt to call certain selected individuals evenly in the area of interest; they should also do the same after the plan has been unveiled over sometime to find the feedback of the customers. The other evaluation process is use of the company records, the company keeps records of sales, sales indicates the number of products that are discharged to the final consumers. The interpretation in this sense is that the more sales made in the market, the more distributors in the supply chain will be making more orders in the company, so it is a direct measure of how the product is faring in the market after the implementation of the plan (Reingold 2013, p.26). Through these records, the company will be able to know the overall effect of the change that is brought by the plan in the company and therefore it can serve as a proper tool to be used for gauging the performance of the plan adopted by the company in efforts to bring change (Greengard, 2008). Reference Sources Given the nature of this concern about P&G Company in the UK, it was imperative that the sources used for this report be the validated and current articles and journals be used to give information on the company. There are also a number of the online sources including the company’s website that was used to gather information relating to the company and has a detailed account of the company in terms of their prospects, challenges facing, and their action relating to the challenges. It has to be realized that P&G Company just like McDonald and Wall-Matt has featured in the global fortune 500; fortune 500 is an annual list that is published released by fortune magazine (Roger 2009, p.16). This magazine considers both private and public companies in the US and their performance in relation to the gross revenue annually. Therefore, it will be appreciated that there are a plethora of information available about the company; there are many information in business article and journals that relates with the company. Therefore, the Company has featured in many journals and articles in the international world that it is easier to get most of the information relating to the company. Hence, in the compiling of this report, information extraction was based only in the recent article and journals that are published not more than three years ago, this was necessary for updated information to be included in this report so that there can be a sound report given on the position of the company (Schofield 2010, p.20). From the many available journals and articles that are given by the publishers, most of them have specific selected concern on P&G Company based in UK; the sources contain the analysis given by several models, which includes SWOT, Five Porter’s Model, and PEST and PESTLE models too. It was thus apparent that information was available concerning the company and with regard to the interest of this report paper. It was for this reason that it was made easy to access information that accounts for the position of the company in UK and how the company is treading in making resurgence in the crowded and competitive landscape of UK markets. The sources used for this report (Articles and journals) were selected based on their contemporary analysis of the company as opposed to other sources like text books that does not give an account of the individual companies. The sources that were used were relating to the performance of the company and its position, the business daily article reports tend to give analysis of the companies periodically and will always give the most updated information relating to any company of international concern like P&G (Silver 2010, p.8). The position of P&G Company in the global business puts it at a critical position that most of the articles and journals written are gravitating towards it. This is even accentuated by the fact that it is an international business that operates in more than one continent and it is envisaged that they will be faced with a number of challenges in every new environment that they opt to do business in. There are several economic, political, social and technological influence that a company tend to come across when the go international in their operations (Singh 2002, p.9). This is the situation P&G company has found itself into and that has made them to feature in many articles and journals that has provided the critical information featured in this report. Critical Evaluation of Leadership in P&G Company The problem facing P&G Company in the UK today can be given a remedy through leadership and management. The company faces issues such as not being sure which brand out of their many brands is popular with the customers, there is the issue of cost of the product, and innovation in the company. For a long time the company has remained behind in working on the customers taste and preferences, they have also not considered engaging in a serious market research so that they can have a clear marketing strategy for the company (Sweney 2012, p.6). There is urgent need for the company to have a strong leadership at the management level so that the issues bedevilling the company’s performance can be scaled down. The leadership that is cognizant of the factors that the company needs to improve on, the system in the company, and that, which has the ability to bring change in a way that will be accepted using employees motivation and appraisals. The management in this regard should consider revamping all the business units and the leadership structures so that they can develop a new leadership structure through the organization so that they can rejuvenate the performance of the company in terms of maintaining the development of the market momentum, drive improvement in productivity, and build a culture of strong innovation. The change should be aimed at improving the efficiency and effectiveness that will propel the momentum behind the strategic growth of the company (Waitley 2006, p.5). In dealing with the challenges facing the company, it will be wise if they consider some of the management model to bring about the required change in the organization. For instance, it would be appropriate for the company to consider McKinsey 7S Framework, in this model, it is proposed that structure, system, skills, strategy, style, staff, and the shared values are supposed to be aligned so that they can work in tandem to be mutually beneficial to each other (Warner 2008, p.3). The restructuring of the leadership style through the use of the models where all the key aspect in the model are engaged, the company will face the challenges with a dedicated common front that will enable them to tackle them. This model of change is important in whichever change is supposed to be implemented in the business, be it on creating new processes, changing leadership, departments restructuring, merger, and new systems of operation. The model provides a proper understanding how the organization’s elements are interrelated and will ensure that any changes that occur within the organization are carefully considered and appropriate action taken (Katc, 2012). The seven interdependent elements can be used for the purpose of enhancing the company’s performance, in determining how best, implementation of a proposed strategy can be done, examine the possible impacts in that the company can experience given the changes proposed, and it can also be used to align on the different department that are brought together following a merger. Following the change that is proposed for P&G in this report, it can be seen that clearly, if the company uses this model, they will be able to get most of the things right regarding the challenges facing the company currently (Wing-sze 2010, p.15). They are able to find a talented, dedicated, and committed team that will drive the company into new heights; they will also be able to do a structured market research that will give them direction on where to spend most of the energy. Conclusion P&G is one of the international companies and it is true that they feature as one of the prominent employer in all the continents in the world. In this regard, the company should respond appropriately in understanding the challenges they are facing in most parts of the world and reciprocate by addressing them adequately. As an international company, P&G are bound to face several challenges that are peculiar from one place to the other, in UK as in the report one of the most affecting challenge the company is facing includes branding of their products. The company should therefore invest in research that will enable them to identify the most preferable brand by the customers so that they can increase the level of their customer satisfaction. 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