Procter and Gamble’s Organizational Culture

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Table of Contents

Abstract
Description of Procter and Gamble
Procter and Gamble’s Culture
Signs of the Innovative Culture
Factors for the Incorporation of the Culture
Effective Leadership Style
Cultural Change
References

Abstract

Organizational culture entails the way a business carries out its functions; it reflects on the ideals of a company. A firm’s values, actions, beliefs, norms, and practices show its overall culture. Procter and Gamble (P&G) has built its foundation on the innovation culture, as evident in the manner in which it has dominated the global market with products that satisfy consumer needs.

With a strong innovative foundation, P&G has remained profitable even during the 2009 economic meltdown. The management has allowed all departments to go beyond the known limits or boundaries to generate better results.

Description of Procter and Gamble

Founded by two UK citizens, James Gamble and William Procter, Procter and Gamble is an American multinational company with its headquarter in Cincinnati, Ohio.

The company deals in consumer goods, such as personal care products, disposal nappies, laundry detergent products, prescription drugs, and pet foods. Launched in 1837, the company took along time to conquer the market as it is today; it relied on innovation and creativity to manufacture and supply products that met the needs of the customers (Purpose, Values, and Principles, 2012).

For instance, P&G started marketing ivory soap that could float on water, and went on to give employees a stake in the management process. The company made Cincinnati a regional hub for animal products. In 2009, P&G recorded total sales of over $80 billion under Robert A. MacDonald as the CEO. From mid-2011, the company has demonstrated steady quarter-to-quarter growth.

Procter and Gamble’s Culture

Procter and Gamble has relied on a unique culture to run its services. Throughout the 177-year history, the company has witnessed immense growth and evolution with a culture bestowed on its principles, values, and purpose. P&G relies on innovation as its game changer (Creating Innovation for Competitive Advantage, 2013). Just like the Hewlett-Packard, Apple, DuPont, and Nokia companies, P&G has relied on a game-changing innovation culture.

Since 2000, the executive officer, A.G. Lafley has prioritized research and development (R&D) among other key functions for the business. A focus on social and product advancements has seen the company direct $2 billion annually to research and development. As a way of maintaining customers’ confidence in the current uncertain market, Bruce Brown of P&G has laid out long-term strategies for business growth. In addition, Bruce has remained steadfast in the implementation of innovative ideas.

Signs of the Innovative Culture

The innovation culture is evident within P&G in the manner in which Lafley and his team of world-class technologists in personal care products, disposal nappies, and pet foods bring in more employees into the innovation game. This move has helped P&G to continue to be among the most innovative multinational firms.

The team went on to create a social system that would assist in harnessing the skills and ideas of all persons within the company (Alvesson, 2002). Evidently, the integrated approach to R&D at P&G has brought sustainability in the achievement of both business and corporate objectives, as well as long and short-term goals.

Factors for the Incorporation of the Culture

Numerous factors made P&G to embody the innovation culture. Cost reduction is one of the key factors that the company has been pursuing in its quest to maintain competitive advantage over its competitors. With a well-motivated staff, the 126,000 employees are able to devise new options that appeal to consumers. This marketing strategy has made it possible for the multinational company to maintain a profitable top-line growth.

The innovation team’s belief that consumer is the boss drove them towards coming up with products that meet the needs, or satisfy the tastes and preferences of the customers (Merrill, 2008). During this time, products like pampers, tide, and crest have received high innovation levels.

The company has 26 R&D centers across the globe; they all focus on the customers’ demands, and respond positively to customers’ feedbacks in order to enhance continuity in the dynamic market. Therefore, the fast changing tastes and preferences among consumers also made it possible for P&G to encompass the innovation culture.

Effective Leadership Style

With the uncertainty in the market, continuous innovation at P&G is eminent. As a result, an innovative leader is best suited to manage the company. Such a leader is well positioned to meet new challenges in the process of inventing new dynamics of handling products. Innovative leadership gives space for employees and other stakeholders in a firm to display their talents, ideas, and thoughts without rebellion from the top management (Pillai & Doe, 2003).

Moreover, an innovative leader will be flexible in including consumers’ feedbacks in the design and production of new products. This flexible leadership style will make it possible for P&G to achieve its strategic goals and objectives.

Cultural Change

A decline in the demand for products would result in restructuring of the company’s innovation culture. A re-strategy of the culture would entail applying product differentiation and cost-cutting strategies. Since an increase in price of a product in relation to its substitute can result in a decrease in demand, cost-cutting mechanisms become applicable.

Additionally, competitors producing similar goods may require production of the same product, but with different features. The innovative culture can work well in restoring the demand of Procter and Gamble’s products.

References

Alvesson, M. (2002). Understanding organizational culture. London: SAGE.

Creating Innovation for Competitive Advantage: A Procter & Gamble case study. (2013). Business Case Studies. Web.

Merrill, P. (2008). Innovation generation: creating an innovation process and an innovative culture. Milwaukee, Wis.: ASQ Quality Press.

Pillai, R., & Doe, S. (2003). Teaching leadership: innovative approaches for the 21st century. Greenwich, Conn.: Information Age Pub.

Purpose, Values and Principles. (2012). P&G Purpose, Value and Principle foundation of unique culture. Web.

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