Proctor & Gamble Organizational Evolution
After our discussion of various organizations, I ran across an article published in The Economist entitled “From baron to hotelier.” The published date was May 9th of 2002. In the article, the main discussion centered on how multinational corporations were redefining the roles of country managers, those corporate heads who were responsible for management of the corporation’s assets within a specific country.
Following the downsizing of many corporations in the mid-1990s, the responsibilities of many of these country managers were eliminated and handed off to global business division managers in hopes of creating a unified global strategy. Some of the corporations included Visa, Oracle, and Proctor & Gamble.
However, P & G has reversed itself and given some decision-making responsibility back to country managers. According to P & G representative Kerry Clark, “This is an area we have been struggling with.”
P & G’s new model differentiates between high-income markets and low-income markets and handles the decision-making for each market differently. In richer countries, management is handled by the global division. For smaller markets, which include China and Eastern Europe, country managers have more control.
The new model also differentiates between product usage, and manages those lines differently. For products which are used in similar ways all over the world, like Pantene shampoo, management is handled at the global level. For products such as laundry detergent, where local habits determine how the product is used, control is given to the regional managers.
According to Clark, the goal is to be globally efficient as well as locally sensitive.
How can P & G handle such a complex organizational model? One key to success is a comprehensive information management infrastructure which allows for the speedy exchange of information between managers at all levels. Local managers can exchange information about neighboring resources to avoid conflict and redundant behavior, while global managers can extract information from the periphery.
Rich Brown
posted by Mary Ann @ 8:59 AM
2 Comments:
The company's own admission of struggling with how they structure their divisions is interesting. This would suggest that the company realizes it must move from a mechanistic model of organization to a more organic model in order to be responsive to their customer base.
In his article, "Thinking About Reference Service Paradigms and Metaphors," Frederick Reenstjerna points out that libraries, and especially reference services are going through a similar change. He points out that libraries, through paradigmatic changes, should change the way in which they are departmentalized (much like the article you refer to) in order to be more responsive to the library clientele (Reenstjerna, 2001).
The Information Management world has a concept of "community of practice"-- that's where people with similar business problems form a virtual community in order to share solutions and insights. IM wisdom is that if you can get a good community of practics going, you can pretty much do anything.
The trick with communities of practice is that they need to be nurtured, especially to start. People won't get passionate about them until the community provides them with value, but it won't provide them with value until there's a vibrant, ongoing discussion. So the community of practice coordinator has to be a bit of an evangelist, a bit of a salesman, and a bit of a den mother, all rolled into one.
I believe British Petroleum created communities of practice for the engineers working on the drilling rigs, and the experiment turned out to be very profitable.
Aspen Junge
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