How Procter And Gamble Manages Business Essay

Nowadays every business is trying to expand its market to the world. There are many factors that help the company to achieve in the business world such as generating new products, a good marketing plan and knowing the important factor of cultural diversity in each country. Procter and Gamble (P&G) is one of the most successful companies in the world. Resulting from effective business operation through cultural diversity, P&G has become one of the most successful organizations. P&G is the largest consumer goods production company in the world and well known around the world with a long history. P&G is concerned about cultural diversity and they place an importance on it. Robert Mcdonald, Chairman of the Board, President and CEO and Linda Clement-Holmes, Past Chief Diversity Officer, and Senior Vice President, Global Business Service mention that “Even during a challenging business climate, Diversity & Inclusion remains a key priority. We believe diversity and inclusion is a competitive advantage”. [1] Therefore P&G is a good example in the education of young business workers and other companies to succeed in international business. This paper focuses on the issue of a global workforce by relating how P&G manages a global workforce and remains successful in international business.

II. Company Overview:

Procter and Gamble (P&G) is a company focused on consumer goods production. The company provides brands and packages goods involved in Beauty, Grooming and Household Care. The company was founded by William Procter and James Gamble in 1837 and is headquartered in Cincinnati, Ohio. P&G is the largest company in the world that serves 4.6 billion consumers globally, produces and markets more than 300 brands and sells in more than 180 countries. To better support the global marketplace, P&G divided their geographic structure into four regions North America, Asia, Latin America, and Europe/Middle East/ Africa. [2] 

P&G’s History

William Procter who was candle maker and James Gamble who was soap maker both of them immigrated from England and Ireland. They are located to Cincinnati Ohio. After that, their father-in-law persuaded them to joins a business partners. Therefore, Procter and Gamble was founded in 1837. [3] 

In the 1880s, the company produced a new product named Ivory. Ivory was a cheap soap that did not sink in water. During the American Civil War in 1858-1859, the company signed to provide the Union Army with soap from Procter and Gamble. In addition, to increase profit and product demand, it developed a lot of product lines that were related to soap such as for hair, laundry and dishwashers. [4] Moreover, in 1887, P&G began a profit sharing program for company workers. This program helped the workforce join their crucial duty with the company’s success. [5] 

In 1915, P&G started to build factories outside the United States because of the demand for products. P&G opened another product facility in Canada for soap and Crisco. [6] 

Radio grew more popular in the 1920s and 1930s, and P&G sponsored radio programs. That is the origin of the word “soap operas”. Moreover, P&G is the first company to manage data based market research with customers. This research helps the company enhance customer understanding and respond to consumer needs. [7] 

P&G is the first company that instituted the Consumer Relations Department to respond and connect with the consumer in 1941. In addition, in 1973, the company created a toll-free phone number an e- mail in the 1980s to improve customers’ ability to contact the company. [8] 

In 1984 P&G was one of the top 100 Best companies to work. Each year, the company receives many global honors for diversity, value, and improvement of lives. [9] 

P&G obtained the honors from the U.S. Government’s National Medal of Technology in 1996. Since P&G is the company that improved and created advance technology for response to the consumer needs. [10] 

In 2010, P&G understood the consumer needs and created the modernization program for help touch, on consumers’ needs. This enhanced consumers’ lives to complete the company’s goal. Moreover, P&G was one of the sponsors of the London Olympic Games in 2012. [11] 

Products

For more than 170 years, P&G has provided 50 leading brands around the world and 25 brands have more than $1 billion in annual sales. About 4.6 billion consumers use P&G products every day. For consumers better life style and brand loyalty, P&G tries to improve their products by observing and testing in order to get the best suitable products for their customers. P&G’s brands can be divided into two groups: Beauty and Grooming; and Household Care. The top products include the following [12] :

Beauty and Grooming: Gillette, Olay, SKII, Head and Shoulders, Herbal Essences, Pantene, Rejoice, Safeguard, Always Ivory, Oral-B, Gucci Fragrances, Dolce & Gabbana Cosmetic and CoverGirl.

Household Care: Duracell, Mr. clean, Swiffer, Pampers, Tide, Downy, Dash and Gain. [13] 

Figure 1: P&G Popular Products [14] 

P&G SWOT Analysis [15] 

Strengths

Most important market position collected on a convincing brand portfolio

Significant R&D and marketing investments

Durable cash productivity

Weakness

High instance of product recalls

Opportunities

Future increase plans with focus on growth attention on its essential good-looking business and improving its consumers base

Increase investment in production ability in developing countries

Threats

Rising inflation could cause considerable increase in the work cost

Fake goods

SWOT Analysis Overview

P&G is the largest consumer products company in the world. From past until now P&G still leading market position collected on a strong brand portfolio with incomes of $78,938 million and serves products to 4.2 billion people. Moreover, P&G also provided significant research and development and marketing investment to investigation the products for respond the market. P&G invested a lot of money with R&D part and marketing. The company use R&D by attempt to connect with customer around the world for research and learn customer behavior and focused on consumer understanding. [16] 

However, P&G is the company with a difference kind of product and large size but sometimes mistakes can happen in production. Some product brands are often recalled such as in November 2009 P&G recalled Vicks Sine X nasal spray from Germany, UK and US because of the company found bacteria B. Cepa cia from product that produce in Germany. Later in March 2010 P&G recalled Pringles the potato ship because of Food and Drug Administration (FDA) found the Salmonella bacteria that cause of hazard with healthy.

Repeated products are often recalled cause the company less in consumer trust and impact with company financial. [17] Moreover in the future P&G has plan to focused on growth attention on its essential good-looking business and improving its consumer base for maintain the company that largest consumer product in the world.

The attractive point from analysis is how P&G adapt and develop diversity challenges to be its strength for improve business becomes to strength business strategies and develop products for respond consumer around the world.

The particular issue the company has to face in global workforce

Over its 175 -year history and professional background, the other factors that make P&G success in the world is understand with its employees, consumers behavior and culture diversity. Although P&G is an American company but it has strong growth from the mid 1940’s to 2000 on international. P&G products are available in North America, Latin America, Central and Eastern Europe, Western Europe, the Middle East, Africa, Asia, New Zealand and Australia. [18] Therefore the one essential challenge of P&G is a Global Workforce.

Although P&G has encounter with global workforce and culture diversity, understanding the difference and issue of culture diversity and context of international business can help P&G is successful in global market. Moreover company must have learned how to improve and how to solve the issue to the company for success in business world.

When the company wants to work in different culture, employees must have to understand and consider about the culture in each country. Employee should be considered which country is low context or high context by observing the people behavior in each country. If the employees understand the culture and known how it contrast with each other it is the important step to complete intercultural proficiency and increase ability to working in global workplace. [19] 

If the company wants to be successful in global business, there are various types of behavior suggestion that should be applied and avoided in order to increase a performance of intercultural communication. Therefore, the following recommendations will help the company improve and develop the culture diversity obstacle for company successful in international business.

Obstacle of intercultural communication [20] 

Stereotype is a distorted attitude of groups of people related to their race, nationality and sexual orientation. As stereotypes lead to bias and disregarded the diversity within groups, stereotypes should be avoided.

Prejudice is an aggressive attitude about some people or group of people. Prejudice is not based on experience but based on misunderstanding and generalization.

Ethnocentrism is belief in your own culture that right, reasonable and better than the other cultures.

Discrimination is the obvious action to except, bypass or break up oneself from the other groups.

Language Differences is people who from different culture or different country may pick up the vocabulary of a new culture. This situation lead to misunderstanding between people.

Suggestions for develop communication among diverse work place audiences [21] 

Seek training. Particularly in international organizations that face to diversity problems. Companies should provide training to employees about workforce diversity and increase employees’ skill about intercultural communication.

Understand the value of differences. Diversity makes n organization creative. If the company recognizes the difference and importance of each customer groups, the company will be able to run it.

Make fewer assumptions. Companies should not assume that all customers wants the same products or like the same products. Companies should produce product variety for customer’s option.

The Company’s solution to the issues: How P&G manages a global workforce

How P&G apply suggestions for develop communication among diverse workplace audiences with the P&G’s case.

Seek training

In order to understand the culture and behavior of customers is not easy because different culture, difference group and difference age it makes different demand of customers. Therefore P&G recognizes the importance of employee’s diversity training. At P&G diversity training is one part of management programs that explain different about diversity attitude that make the company successful. [22] P&G’s employees must learn the goodness of diversity culture through program called “Cultures At Work”. This program is taught about culture context that consist of high context cultures such as Asia cultures are more likely thoughtful and instinctive and low context cultures such as German and North American communicators are more likely to use linear logic. [23] 

Understand the value of difference

A lot of companies such as Wal-Mart must failed when expand the branch to foreign country because of culture diversity. Like P&G the important problems of P&G are face with diversity workers and communication problem in international employees. The essential of company strategy P&G want to support employee’s culture diversity by established the seven corporate affinity groups for understand about workers culture and behavior in each group. Corporate affinity groups are consist of African Ancestry Leadership Network (AALN), Corporate Women’s Leadership Team (CWLT), Gay, Ally, Lesbian, Bisexual and Transgender Employees (GABLE), Asian Pacific American Leadership Team (APALT), Hispanic Leadership Team (HLT), Native American Indian Leadership Team (NAILT), and People with Disabilities (PWD). [24] P&G understand the value of diversity board chief. Thus 11 board members of P&G are consist of two are Black, one is Asian, one is Latino and four are women. [25] 

Make fewer assumptions.

Procter and Gamble avoid the idea that the product is available in one country will be available to other countries. From errors in the past such as in Mexico P&G produced the Downy Single Rinse this product help to clean clothes. However P&G did not think about the differences washed clothes way between American customers and Mexican customers. American use washing machine while Mexican washed clothes in rivers. Therefore, this product was failed in Mexico from this case it makes the P&G try to research customer behavior and exert time and money for explore target market. [26] As a result, P&G design to run the “Living It” campaign in order to authorize company workers to live with consumers in their home, go to shopping with consumers for notice consumer behavior when they want to buy some products. Moreover, P&G design another associated campaign “Working It” campaign in order to support “Living It” campaign by company workers hang out the small shop and observation about shopper behavior and products in shelves for assemble information and bring it to develop company product in the future. [27] From this campaign bring the P&G become to success in the business market and can expand the product through a lot of countries.

Conclusion

P&G global workforce problem can be solved by the company tries to understanding and developing the culture diversity and international communication. Another factors that makes the P&G complete in global market is research the customer behavior, develop and improve the product that support the customer want. As many of cases of the past P&G always to researches and studies about customer culture in each country and develop the new products for support the customer and find the way to run business across cultural. In addition, P&G applying the methods for enhancing communication between diverse workplace that help the company to handle with the problem of the global workplace and improve employee’s ability to work in international market.