Proctor and Gamble’s Organization 2005 Program

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Main body
Conclusion

Introduction

Proctor and Gamble’s (P&G) Organization 2005 was envisaged in being a series of far reaching initiatives in order to achieve a faster growth for the company. The initiatives required wide ranging modifications in the work culture, processes, and organizational structure so as to enable employees to make further efforts in speeding up the process of innovations. Organization 2005 also aimed at leveraging the global presence of P&G as also to enhance profits and sales by launching a range of new products, by shutting down unviable manufacturing facilities and cutting down on jobs. Such initiatives were headed by Durk Jager, CEO of P&G who had assumed the office in 1999. Over a period of six years, these efforts were to cost Proctor and Gamble $1.9 billion. Jager was confident that fast track restructuring was imperative for the creation of innovative expansion opportunities for Proctor and Gamble, and while introducing the new programs he had conveyed his confidence to analysts in this regard. Jager’s new policy pertained to creating an environment which would produce plans and goals that were bolder in bringing about big innovations with better speed. He redesigned the system of rewards for employees in order to strengthen the connection between results and compensation.

Main body

The Organization 2005 program entailed the reorganization of the Global Business Units and establishing of eight regions for Marketing Development Organizations. The Global Business Services of P&G were consolidated in order to have functions such as HR, accounts, IT and order management directly under the corporate organization. Most of the corporate employees were shifted to the new units and the company redesigned its training programs to bring better results from employees. However despite his best efforts, Jager fumbled and was not able to carry forward the plan effectively and he resigned. The news sent the company’s stocks tumbling down to levels that were the lowest since the mid 1990s. He was succeeded by Lafley who seemed to be on the right track after taking over the mantle, but it still remains to see whether the moves made by him will pay off for Proctor and Gamble.

The prime reason for Jager’s failure was that he exerted extra pressure on the P&G executives to quickly bring the company products into the market. Jager’s acquisition of American Home Products and Warner-Lambert proved to be failures and his plans proved to be very aggressive due to the reckless introduction of new products. Managers were not appreciative of his style of confrontation and there was increasing disenchantment amongst them. Organization 2005 was to be completed in June 2003, and after the removal of Jager, Lafley had changed the company’s focus towards enhancing the market share of its bigger brands in markets that were already developed. It would be advisable for Lafley to first convince his people in detail about the objectives of the program. He needs to bring about better discipline amongst executives and managers and to organize their working environment into a systematic team work so as to bring about synergy and better performance. His biggest challenge is to generate growth for the company by introducing the company’s products in new markets so as to grab a larger chunk of the market share especially in the developing economies. This is so because Proctor and Gamble already has a dominating market presence in the mature markets.

At this stage when so much has already been done in terms of investment and efforts, Lafley cannot revert to the previous organizational structure but has to improve upon the present circumstances within P&G to bring about a positive turn around.

Organization 2005 entailed huge costs for P&G, and Lafley will have to strike a balance between making the best of the remaining staff and the reduced resources available to meet the given targets. By restructuring the management team he can improve upon the operations of P&G and thus increase profitability. He needs to also bring reforms by way of bringing in an efficient supply chain management so as to streamline the cost structure to reduce manufacturing costs and overheads.

Conclusion

It becomes more important for Lafley to boost employee morale in view of the policy of large scale retrenchment adopted by Jager. New employee rewards programs have to be initiated so as to enhance trust of the organization in the view point of company staff. He will have to make full use of the usual retirements and attritions, voluntary separations, job retraining, relocations and hiring reductions. A good idea for Lafley will be to offer existing employees additional responsibilities and to provide them training and lucrative incentives in learning new skills.

Click Here To Order Now!

Proctor and Gamble’s Organization 2005 Program

Do you need this or any other assignment done for you from scratch?

We have qualified writers to help you.

We assure you a quality paper that is 100% free from plagiarism and AI.

You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)