Procter and Gamble

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Institute of Business and Information Technology

PU, Lahore

Project Report

Procter and Gamble

Organization Theory and Design

F10BB (Morning)

Submitted To:

Maam Heena Saleem

Submission Date

11thJune, 2014

Group Members:

Abeeha Mahmood F10BB038

Taliha Ghazi F10BB037

Saba Javed F10BB008

Komal Asim F10BB036

Fatima Mushtaq F10BB004

Zunaira Mumtaz F10BB018


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Table of Contents

Brief History and Background of the Organization: ....................................................................... 3

Structure of the Organization: ......................................................................................................... 6

Structural Dimensions of the Organization: ................................................................................... 8

Goals, Strategies and Effectiveness: ............................................................................................. 10

P&G Goals and Objectives: ...................................................................................................... 10

P&G Company Strategies: ........................................................................................................ 13

Organizational Strategies: ............................................................................................................. 14

The External Environment Analysis: ............................................................................................ 16

Technology: .................................................................................................................................. 17

Life Cycle Assessments: ............................................................................................................... 20

Innovation and Change: ................................................................................................................ 21

Conflict, Power and Politics: ........................................................................................................ 25


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Procter and Gamble

Brief History and Background of the Organization:

Procter & Gamble is the largest consumer goods company in the world and sells products under

more than 80 brand names. The Procter and Gamble Company is today more familiarly known as

P&G, and it has grown from its humble roots as a Cincinnati soap maker to one of the 20 largest

multinational corporations in the world (based on sales).

P&G took a long time to become the wonder brand they are today. The path to success took a lot

of creativity and innovation.

P&G invented branding in the 19th century; since then it has acquired products and companies

like wildfire, from Cover Girl to Pepto Bismol.

Here's how the little soap and candle shop transformed itself into a global giant.

1837: Two Ohio brother-in-laws start soap and candle company:

P&G was founded in 1837 by William Procter and James Gamble, working-class immigrants

from England and Ireland, respectively. William Procter was a candle-maker and businessman

by trade, and James Gamble was a soap-maker who also became involved in the candle-making

business.

Procter and Gamble met when they became brother-in-laws as they each married one of the

daughters of successful Cincinnati businessman Alexander Norris. Norris noted that his new sons

were competing for the same raw materials. He suggested a joint venture. After several years, the

sons agreed and on October 31, 1837, they signed the partnership agreement that founded the

Procter & Gamble Company. Their total assets were $7,192.24.

1883: P&G launches its first big brand, Ivory Soap:

Procter & Gamble branded its first major productIvory Soap.

After designing the eras purest bar of soap and trademarking the word ivory, the company

embarked on a mass marketing campaign to promote the product.


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It took out an ad in The Century Magazine, the most popular monthly of its day, as well as in

smaller, local papers. Almost one decade later, Ivory Soap got its very own slogan: It floats!

1930: P&G goes international when it buys a British soap maker:

Procter and Gamble became an international corporation when it bought England's Thomas

Hedley & Company, the makers of Fairy Soap. Like Ivory Soap, Fairy Soap also boasted its

ability to float.

Today, P&G has workers in over 80 countries and distributes many of its products worldwide.

1946: P&G revolutionizes laundry with Tide detergent:

After the war, Procter & Gamble grew tremendously thanks to a new product, Tide. The

washday miracletransformed households by making laundry easier and faster.

By the late '40s, detergent replaced soap as the preferred way to clean clothes. Tide became the

number one brand. Early Tide ads, which had a $21 million dollar budget, used bright colors and

images of happy housewives to entice consumers.

1955: P&G develops Crest toothpaste and it quickly becomes the #1 brand:

After five years of research and development, P&G introduced Crest toothpaste.

The new fluoride-based formula claimed to help fight cavities better than any other brand. In

1960, the American Dental Association endorsed the brand and by the end of the next year, Crest

replaced Colgate as the number one brand. This milestone solidified P&G's place in the toiletries

industry.

1956: P&G hits a major sales milestone$1 billion!

P&G hit its $1 billion sales mark in 1956. Today, that figure is about $80 billion.

1961: P&G starts making disposable diapers and parents everywhere rejoice:

Procter & Gamble spearheaded the mass production of disposable diapers by introducing

Pampers to households everywhere.


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P&G engineer Victor Mills came up with the idea after his grandson was born. Mills, like many

other consumers, had grown tired of messy cloth diapers and spent years trying to figure out an

easier way to get the job done.

1950s and '60s: P&G invades kitchens everywhere with food and beverage products:

Technically, P&G had been helping dinners get made since the very beginning when it sold lard

for cooking. And In 1911, it began selling Crisco, the first all-vegetable shorteningan instant

hit!

The company really took over kitchens, though, in the mid-20th century with Jif peanut butter

(1956) and Folgers coffee (1963) and Pringles (1968).

1982: Got a cold or a stomach ache? PG can now take care of you:

PG added Pepto Bismol and Chloraspetic to its rapidly growing family when it

acquired Norwich-Eaton Pharmaceuticals in 1982.

Then, in 1985, the company bought Richardson-Vicks, the makers of Vicks and Nyquil, for $1.2

billion (its largest purchase yet), as well as the brands Dramamine and Metamucil.

These purchases solidified P&G's place in drug stores everywhere.

1988: P&G enters the beauty business when it buys Cover Girl and a slew of similar

brands:

In 1989, Procter & Gamble entered the makeup market when it bought Noxell, the company that

makes CoverGirl and Noxema, in a $1.34 billion deal.

Then, in 1991, it scoops Max Factor and Betrix from Revlon. Though P&G acquired Pantene

hair products in the '85 Richardson-Vicks deal, it wasn't until the '90s that it became a billion-

dollar brand.

A successful marketing campaign helped make the product a beauty essential, rather than a

functional cleaning device.


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Today: Procter & Gamble brands keep spreading:

These days, Procter & Gamble owns 83 brands, 23 of which raked in over $1 billion last year.

It even earned a top spot on Forbes list of theworlds most admired companies, thanks to

innovative products like the Swiffer and marketing ingenuity like the Old Spice guy.

Structure of the Organization:

P&G implements a Divisional Structure in which the divisions are organized according to

individual products, services, product groups, major projects or programs, divisions, businesses,

or profit centers. The distinctive feature of a divisional structure is that grouping is based on

organizational outputs. This structure promotes decentralization, increases adaptability,

encourages high level of cooperation among divisions, and leads to ultimate customer

satisfaction.

P&G has made organization structure an important part of their capability to grow. It combines

global scale benefits with a local focus to win with consumers and retail customers in each

country where P&G products are sold.


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P&Gs structure has removed many of the traditional overlaps and inefficiencies that exist in

many large companies.

Global Business Units (GBUs) focus solely on consumers, brands and competitorsaround the world. They are responsible for the innovation pipeline, profitability and

shareholder returns from their businesses.

Market Development Organizations (MDOs) are charged with knowing consumers andretailers in each market where P&G competes and integrating the innovations flowing

from the GBUs into business plans that work in each country.

Global Business Services (GBS) utilizes P&G talent and expert partners to provide best-in-class business support services at the lowest possible costs to leverage P&Gs scale for

a winning advantage. Lean Corporate Functions ensure ongoing functional innovation and capability

improvement.

They have been utilizing this structure for over a decade, and continue to see faster global

expansion of new innovations, better in-market execution and increased savings from purchasing

scale and outsourcing partnerships.

This structure is designed to have three major benefits: (1) it enables corporate officers to more

accurately monitor the performance of each business, which simplifies the problem of control (2)

it facilitates comparisons between divisions, which improves the resource allocation process; and

(3) it stimulates managers of poorly performing divisions to look for ways of improving

performance. Active monitoring of performance through this structure increases the likelihood

that decisions made by managers heading individual units will be in shareholders best interests.


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Structural Dimensions of the Organization:

Formalization:

P&G takes due care that their employees are well aware of their responsibilities and duties by

keeping a constant check on their performance. It also takes care to provide its employees the

best working conditions, which is apparent from the fact that P&G provides an atmosphere

which is tranquil and highly professional where every manager has his own workstation and

every employee has his own desk.

Procedures, regulations and policy manuals are maintained but job description at P&G, however,

is not pre-structured but is prepared with the joint consultation of the Human resources manager,

the department head and the applicant himself. This description is then matched and adjusted

accordingly with that prepared by the parent company. Though highly formalized, P&G displays

flexibility in this respect by allowing its employees full participation in setting goals and

objectives.

Specialization:

The degree of specialization is low in P&G. For each and every employee, they have an in house

training program where employees are trained not only regarding their technical or academic

skills, but also learn to enhance their interpersonal skills so that they can develop bettercommunication skills, work efficiently as team members and be prepared to face challenging

environments comfortably. Through these trainings, the employees also learn to cope in different

and diverse environments and develop practical skills so that they could be at par with this ever

changing and tough business environment.

Hierarchy of Authority:

As you can see from the chart given below that the spans of control are wide as P&G follows a

horizontal grouping for their structural design, in which the employees are focused around core

work processes, the end-to-end work, information, and material flows that provide value directly

to customers.


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Centralization:

As we have already observed that P&G implements a Divisional Structure; henceforth it is

correct to analyze that degree of centralization is low where decisions are delegated even to the

lower levels of the organization and the company works in a highly cooperative and supportiveenvironment.

Professionalism:

High levels of formal education and training is required for all P&G employees. Although they

have no CGPA criteria for recruitment but they do give importance to proper formal education

and training. Job standards are benchmarks against which employee performance is measured. It

also serves, as the goals the employees are required to meet. As the goal setting at P&G is done

by the employees participation there is a high level of motivation and there is seldom a person

who performs below par. P&G boasts of its standards always being met by its employees.

Developmental training is also conducted here which helps an employee to improve his or her

work performance. The employees here are also trained regarding safety, health and legal issues.

So through these trainings they turn an employee into a leader.


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Goals, Strategies and Effectiveness:

P&G Goals and Objectives:

Procter & Gamble, the FMCG giant, is focusing on four key goals to drive its business forward,

including driving greater returns from its marketing investment.

1. P&Gs top management states that value creation for consumers and shareowners is theirtop priority. Operating Total Shareholder Return is an integrated measure of value

creation at the business unit level requiring sales growth, progress on gross and operating

margin, and strong cash flow productivity.

2. A second point of emphasis involves improving the organizationsoverall productivity -covering everything from its use of materials to logistics to its marketing spend. The

return on their marketing investments, measured in sales, ranges from less than $1 to over

$25 for every dollar invested. They spend roughly $14bn annually in advertising and non-

advertising marketing spending. If they increase the return on the spending by just 50

cents, they could free up several billion dollars to either reinvest or take to the bottom

line.

3. Procter & Gamble's third objective takes the form of improved execution and operatingdiscipline" across the entire corporation, from "only airing" ads which generate

significant payback to staying ahead of regulation. It's not about exhorting the

organization to do better. It is about rigorously following tried-and-true work processes

that deliver results.

4. A final priority incorporates making strategic investments in its innovation and go-to-market capabilities, augmenting the new-product pipeline and extending its sales

coverage across countries and categories. Budget increases in R&D will enable them to

strengthen their near and mid-term innovation pipeline. Go-to-market investments will

improve sales coverage in their fastest-growing markets and fastest-growing channels.

As far as sustainability is concerned, at P&G, sustainability means making every day better for

people and the planet through how they innovate and how they act. It is about delighting

consumers with innovative products and services that are better for the environment. Its about

operating responsibly in their supply chain and treating the employees fairly. Its about providing


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health and hygiene education to children around the world and responding to natural disasters.

As the worlds largest consumer products company, they have both a responsibility and an

opportunity to do the right thing and create change.

Environmental Sustainability

As part of their strategy to grow responsibly, their environmental efforts are focused on three

areas:

Conservation of Resources Renewable Resources Worth from Waste

They are inspired by their long-term sustainability vision, which establishes stretching endpoints

for their environmental efforts. To ensure they are making progress toward their vision, they

have set specific, measurable goals within these three environmental focus areas.


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Social Responsibility:

Their social efforts include both how they operatetheir policies and practicesas well as

programs that support the communities where they live and work. Consistent with P&Gs

strengths, these programs address two focus areas for people around the world:

Comforts of Home Health and Hygiene

Through this work, they are leveraging the Companys core competencies to address critical

social needs, such as those outlined in the United Nations Millennium Goals focused on housing

and sanitation as well as child and maternal health.

P&G Company Strategies:

P&G is focused on strategies that they believe are right for the long-term health of the Company

with the objective of delivering total shareholder return in the top one-third of their peer group.

They are focusing their resources on their leading, most profitable categories and markets.

They will focus on their core markets, such as the U.S., to strengthen and grow thesebusinesses.

They will focus their developing market investments on the categories and countries withthe largest size of prize and highest likelihood of winning.

They will focus the portfolio, allocating resources to businesses where they can createdisproportionate value.


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To create flexibility to fund their growth efforts and deliver their financial commitments, they

are working to make productivity a core strength for P&G. They have taken significant steps to

accelerate cost savings, including a five year cost savings initiative which was announced in

February 2012. The cost savings program covers all elements of costs including cost of goods

sold, marketing expense and non-manufacturing overhead.

Innovation has always been - and continues to be - P&G's lifeblood. To consistently win with

consumers around the world across price tiers and preferences and to consistently win versus

their best competitors, each P&G product category needs a full portfolio of innovation, including

a mix of commercial programs, product improvements and game changing innovations.

Finally, they are focused on improving operating discipline in everything they do. Executing

better than their competitors is how they win with customers and consumers and generate

leadership returns for their shareholders.

Given current market growth rates, the Company expects the consistent delivery of the following

annual financial targets will result in total shareholder returns in the top third of the competitive

peer group:

Grow organic sales modestly above market growth rates in the categories andgeographies in which they compete,

Deliver Core EPS growth of high single digits, and Generate free cash flow productivity of 90% or greater.

Organizational Strategies:

As youve seen above, P&GsGlobal Business Units have been organized into four industry-

based sectors: Global Baby, Feminine and Family Care, Global Beauty, Global Health and

Grooming and Global Fabric and Home Care. As a result, feminine care has moved from

health care to global baby, feminine and family care. Furthermore, Pet Care has been switched

from fabric care and home care to global health.

As a result of this restructuring, the company can have an industry-wise and geographic focus.

Through this restructuring, the company can improve its market shares in diversified industries

and the geographies it operates in.


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The company can further penetrate existing markets while concentrating more resources into

expansion opportunities. The improvement in the company's performance can be seen stemming

from restructuring and other strategic decisions from top management. The company has

initiated non-core restructuring spending of $67 million before tax in Q1 FY 2014.

Porters Competitive Strategies:

P&G adopts transnational strategy as its multinational strategy in response to both pressures for

local responsiveness and cost reductions. With a transnational strategy the company conducts

operations in several countries with varying degrees of coordination and integration of strategy

and operations. In terms of Porters competitive strategies, P&G generally adopted

differentiation strategy ever since its early overseas expansion. The companys first vice

president of international operations, Walter Lingle said we must tailor our products to meet

consumer demands in each nation.

This principle was inherited because the company tends to provide consumers with superior

personal products to cultivate customer base and their loyalty. The differentiation strategy is

reflected thoroughly in the companys large investment in consumer understanding and

innovation. The company has sufficient global market knowledge through sufficient market

researches and consumer understanding is principle of the companys market ing strategy. Then,

overwhelming innovation investment enabled the company to launch or update products that

meet local consumers needs in regular intervals. In this way, the company was able to retain its

financial growth, customer loyalty, and brand recognition. In addition to product differentiation,

P&G maintain transnational characteristics among its foreign subsidiaries in other parts of

operation as well. For instance, products sold in Chinese market are completely from its

manufacturing centers in China and the companys Chinese branch absorbed Chinese local

human resource as well as international personnel to manage business there.


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The External Environment Analysis:

The PESTLE analysis will be conducted to examine the current external environment for P&G in

the world market.

Political:

With operations in more than a hundred countries of different continents, P&G has to deal with

distinctive political patterns influencing its business operations. On one hand, the company has

to deal with and adapt to political pressures in different nations. On the other hand, with regard

to the corporations size, it plays integral roles to cooperate withand affect local government.

Economic:

The world economy is presenting a pattern of rejuvenation from the recession and world demand

is forecasted to grow in the next years. Hence, the company can have a relatively positive

expectation on its sales performance. However, the development in different market may vary

because unbalanced development situation in different regions.

Social:

The company has to pay attention different social norms during overseas operations due to

distinguished cultural background in different markets. For personal products, social need is

evolving with time. For instance, the demand for mens grooming is rising recent years.

Technological:

As the market size of personal products is very large, major players in this industry invest

significantly to gain technological advantage in order to maintain and expand market positions.

As a result, technology applied in this industry develops relatively fast.

Legal:

P&G has to comply with different national legislations on personal products, process of

production, and business operations.


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Ethical:

Because personal products are essential for peoples daily life, the qualities of products are

extremely important for brands. Any scandals about product can lead to significant damage on

the brand image.

Technology:

The purpose of P&G is to touch and improve lives; everything they do is in that context. With

digital technology, its now possible to have a one-on-one relationship with every consumer in

the world. The more intimate the relationship, the more indispensable it becomes. P&G wants to

be the company that creates those indispensable relationships with their brands, and digital

technology enables this.

Social Media and Blog:

For their social media page and online blog, P&G has developed something called Consumer

Pulse, which uses Bayesian analysis to scan the universe of comments, categorize them by

individual brand, and then put them on the screen of the relevant individual. This allows for real-

time reaction to whats going on in the marketplace, because they know that if something

happens in a blog and you dont react immediatelyor, worse, you dont know about itit

could spin out of control by the time you get involved. The technology also lets the company

improve things that are working. For example, they are rolling out a product called Downy

Unstoppable, a fragrance addition you can add to your wash, and the real-time comments from

consumers about the products characteristics are helping them figure out how best to join in the

discussion through their marketing efforts.

From Factory to Shelf:

From an operational standpoint, P&G also believes that to be successful theyvegot to continue

to improve productivity, and being digitally enabled allows for that as well. So theyre digitizing

their operations everywherefrom manufacturing plants to the stores where consumers purchase

the products. They believe digitization represents a source of competitive advantage.


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In transport and logistics, they created a digitally enhanced operational program they call Control

Tower that lets them see all the transportation theyre doing: inbound, outbound, raw materials,

finished product.

Distributor Connect lets them link directly with the distributors and help them run their business.

This benefits all of them by improving service and reducing inventory across the supply chain.

They want to be digitally connected to retailers too. For example, they use and support GDSN.

Global Data Synchronization Network, which is basically a standardized data warehouse that

allows them to do commerce with their retail partners in a totally automated way, with no human

intervention.

They also have performance standards that retailers in developing markets can visualize on their

phones. For example, they believe you should arrange your store in a certain way to maximize

consumer sales. If you have a store that partner with P&G on this, you can call up the

performance standards on your phone, hold it up, look around your store, and compare it with

what you see. You can take a picture of the shelf, have it digitally compared, and then

automatically send action steps back to the retailer to help rearrange the shelf for maximum

consumer sales. Thats where theyre going.

In fact, some applications like these will probably come back to the developed world as

improvements because theyll be simplertheres no question that progress will be accelerated

by the leapfrogging of technology. Inevitably, everythings got to be usable on the smallest,

cheapest device possible because thats whats going to get the broadest distribution in a

developing market.

Digitizing innovation:

Data modeling, simulation, and other digital tools are reshaping how they innovate. The way

they used to do innovation research required a lot of work and time setting up consumer panels

you need the right distribution of races, ages, and so forth to make them representative. Now,

with the amount of data they have available, the n is so large that by definition they can

immediately have a representative group.


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When you design a disposable diaper the traditional way, for example, by the time you get to the

point where you make a prototype, the prototype itself has cost thousands of dollars, if not more,

and it was all made by hand. Now, using modeling and simulation, you can go through thousands

of iterations in seconds. The key is that youve got to have the data.So the advantage for P&G is

their scale. They have operations in around 80 countries, their products are sold in almost every

country, and they touch more than four billion consumers every day. Imagine all those data

points. They can literally fit any virtual diaper to any baby anywhere in the world.

Theyre even digitizing the creation of molecules. For example, in the research and development

for their new dishwashing liquid, they used modeling to predict how moisture would excite

various fragrance molecules so that throughout the dishwashing process you get the right

fragrance notes at the right time. They did that all virtually.

The Digital Workforce:-

In July 2008 P&G began to put together some very clear strategies to hire people with different

skills. They needed people with backgrounds in computer modeling and simulation. They wanted

to find people who had true mastery in computer science, from the basics of coding to advanced

programing. When youve actually done a simulation, you truly realize the importance of the

data; its classic garbage in, garbage out.

Ultimately, though, P&G has been pretty good about hiring for analytical thinking. They hire

very good people and then train them. Analytical-thinking skills have become even more

important to this company. They need to come up with the ideas to innovate, and those

innovations are always informed by data.

Recent adopted Technology:

Procter & Gamble (P&G) has signed a multiyear agreement for HP to help provide an operating

environment that will keep products moving on time, from production all the way to shoppers

carts in the retail store.

Under the terms of the agreement, HP will be accountable for the comprehensive systems

reliability of critical P&G processes, such as manufacturing, procure-to-pay, order-to-cash,

physical distribution and financial close.


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Additionally, HP will lead P&Gs Information Technology Operations Integration Service and

provide standard tools, processes and an integrated dashboard. This will enable P&G to easily

connect vendors and create a flexible environment that speeds innovation while reducing overall

cost and improving quality.

Increasing market share in todays environment requires innovative business models supported

by great technology, said John Visentin, executive vice president and general manager, HP

Enterprise Services. Through this agreement, we will combine our knowledge of P&Gs

business with the best of HP technologies to deliver business-focused outcomes that will help

P&G achieve its goal to reach its next billion consumers .

Life Cycle Assessments:Procter and Gamble currently exists in the Maturity stage of the Product Life Cycle, but in order

to sustain its position in the marketplace P&G adopts the Life Cycle Assessment model to

evaluate each and every products individual life cycle and its impact on the consumers and

external environment.

P&G uses Life Cycle thinking, a discipline they helped pioneer, to determine a products entire

environmental footprint, from the procurement of raw materials to the products use and ultimate

disposal. By examining the many factors in each step, they are able to assess the products

overall environmental impact.


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With this holistic insight, they can identify steps in the cycle where a sustainable improvement

can have the most positive impact.

For decades, P&G has been a leader in Life Cycle Assessments. The research has allowed P&G

to make reliable decisions on the sustainability and efficiency of ingredients, product

composition, processes, and consumption practices and also stop the products from entering the

decline stage.

Whether it is product compaction, cold water washing, new cleaning technologies or radical

shifts in product composition, P&G will measure the environmental impact amid other concerns

through diligent research.

Innovation and Change:Companies must innovate in order to keep ahead of their competitors. If an organization wants to

create a business strategy that keeps it at the forefront of innovation, it must develop ways of

making that strategy work.
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AG Lafley, the President and Chief Executive of Procter & Gamble, outlined the importance of

innovation to the company. He would like to develop a business in which big ideas attract the

capital and talent they need and points to the innovation equation:

Procter & Gamble is now a global corporation, serving almost five billion consumers, with

operations in 50 countries and products selling in more than 140 countries. With a range of

brands as diverse as disposable nappies, shampoos, laundry detergents and feminine protection

products - this makes Procter & Gamble one of the worlds largest consumer goods companies.

Innovation, Culture and People

One simple definition of organizational culture is the way we do things around here. It helps to

show what an organization stands for and is reflected through the organizations actions, rituals,

beliefs, meanings, values, norms and language.

People are at the sharp end of innovation, not companies. Procter & Gambles human resource

department has the responsibility for the development and growth of people towards higher

levels of skill, competency, creativity and fulfilment, in a way that supports each individual. It

sets out to foster individual improvement in the workplace, with the opportunity for enhanced

work satisfaction as each employee is able to make fuller use of his or her skills and abilities.

Human resource development seeks to ensure that the right people with the right attitude andskills support the Procter & Gamble culture.

Within Procter & Gamble the focus is upon involving people across the business either to

develop their ideas or become involved in working together to make ideas happen. At the heart


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of this culture is the innovative use of connections, centered upon understanding consumers, the

energy directed towards innovation, supported by research and development processes.

There are many inventors, but the ones who are successful are those who bring their inventions

into the marketplace where consumers can benefit from them. An invention is a seed of

innovation, but it remains a seed unless it is commercialized successfully. The birth of a new

product is thus a combination of the skills of people involved in its research and development,

combined with the abilities of others who develop processes that launch the product effectively

within carefully selected market segments.

How P&Gs structure supports innovation:

Organizations that are designed for innovation have three characteristics:

They make it easy for innovation to flow throughout the enterprise. They make it possible to learn quickly from consumers. They make it possible to develop ideas profitably time and time again.

For Procter & Gamble the key to faster business growth, transforming existing markets, making

inroads into new markets and staying ahead of the competition is innovation, not just from one

part of the organization, but across the whole business.

Procter & Gamble currently holds more than 25,000 patents world-wide, and is launching more

products than at any time in its history. Investment into research and development has provided

the business with the unique opportunity to transfer new technological and scientific

breakthroughs across a range of product developments in a way that makes sure that it works. At

a time of unprecedented change in the marketplace, unleashing innovations at a faster speed than

the competition will lead to growth and the further development of the business.

Every time you see an innovative new product on a supermarket shelf, remember that it startedas a good idea in someones head. Some products may be completely new, whilst others may be

extensions, ongoing developments or improvements of existing products. A new product may be

one which replaces or extends an old product opens up a new market; or broadens an existing

market. Ideas for new product development (NPD), whilst all having a clear benefit for

consumers, may come from several different sources including:


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Ideas from salespeople, who are close to customers such as retailers and are in a strongposition to understand their needs

Blue Sky laboratory work in new areas, that creates new product ideas and conceptsthat have never before been explored

Combining two technologies or joining products together to develop a single newproduct, such as shampoo and conditioner

Transferring technologies from one series of products and processes across to otherproduct ranges and to other processes

Extensions of existing products which provide goods in better and more convenient formsfor the consumer

Improving existing concepts, so that all products are constantly developing to meetincreasingly sophisticated consumer requirements.

Procter & Gamble has innovated by introducing proactive development across the company.

This involves making connections between countries, across product ranges, through different

markets and by transferring technologies used from one product range to another. A new product

may simply be created from a minor change involving an extension, or the development of a

totally new product concept.

One key factor is the ability of its people to learn from each other by transferring the expertise or

best practice in product innovation, developed in one country through to another. This enables

different parts of the group to combine technologies and experiences and is known as technology

transfer. Each business unit is involved with product development. Each units research and

development is linked to its markets as well as the activities of the other units.

As a result innovation takes place wherever consumer needs can be met by ideas generated by

staff. In developing the business in a way that integrates progress with the social development

and environmental concerns of a fast-changing society sustainable development is a key element.

Reducing environmental impact and improving manufacturing and product efficiency through

better approaches to innovation can both improve products and also help to develop business

opportunities.


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In a fast-changing world an innovative culture helps an organization constantly move forward.

Having an innovative culture has actively helped Procter & Gamble develop and transfer

technologies and bring new products to market. Creating innovations that give people products

which make their lives easier and better is what creates a competitive advantage for P&G. And is

what has helped P&G become the successful global business it is today.

Conflict, Power and Politics:

Procter and Gamble ranks at #3 in the list of the greatest companies for Leaders; every single

CEO of P&G started at the Entry Level. If that isnt enough, its made the top 5 in every one of

the eight years that the survey has been published by the Hay Group. Leadership Development

has been weaved into the DNA of how the company operates itself. P&G also ranks at the #40 in

Forbes Global 2000 companies list; and Forbes also lists it at #17 in the Highest Rated

Companies Hiring Interns list; the company rating according to interns in 4.2. P&G is also

among the Top 10 of NAFE 2013sBest Companies for Female Executives. If you look at the

Employee Reviews for P&G you will find out that each and every person who has worked there

has stated that its been the best working experience of his/her life because the company provides

a safe, healthful and productive work environment. A company does not reach this sort of

popularity if it is involved in internal politics, conflicts and power that suppress or manipulate

employees.


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According to the values and policies of Procter and Gamble, All employees are obligated to act

at all times solely in the best interests of the Company. A conflict of interest arises when an

employee has a personal relationship or financial or other interest that could interfere with this

obligation, or when they use their position with the Company for personal gain. The Company

requires that employees disclose all potential conflicts of interest and that they promptly take

actions to eliminate the conflict when the Company requests them to do so.

As forgifts, entertainment and gratuities received from outside forces, the values and policies

statement dictates that their policy on gifts, entertainment and gratuities is designed to preserve

and maintain P&Gs reputation as a global enterprise, which acts with integrity and bases

decisions only on legitimate business considerations. Receiving gifts, entertainment or other

gratuities from people with whom they do business is generally not acceptable because doing so

could imply an obligation on the part of the Company and potentially pose a conflict of interest.

As for the improper use of company assets, the Company does not permit improper use of

Company assets. Improper use occurs when an employee uses Company property or information

for personal gain or advantage, or for the advantage of others outside the Company, such as

friends or family members. Improper use also occurs when Company property or technology is

used for more than limited or incidental personal use or used in violation of other Company

policies. Such activities are strictly prohibited.

Bribery, improper business dealings and improper payments to government officials are also

strictly prohibited across the organization.

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Procter and Gamble