Group 8:UM15002 Alisha JohneyUM15013 Ashish ParakhUM15036 Priya Ranjan MohantyUM15046 Shilpi AgarwalUM15054 Shree Kumar SahuUM15056 Syed Shaz Areeb

- A comparative analysis of the Organizational Structure

vs

P&G’s Roadmap1987: Matrix Structure39 US product category Bus were created run by General Managers

2005: Global Business Unit Structure : Annual sales grew 40% since 2000 and stock price nearly doubled

1995-99: Global Matrix Structure

Extended to rest of the world.4 regional presidents were reporting directly to CEO

2013: Hybrid Structure

Product Divisional Organizational Structure

Biggest upheavel in P&G historyFocus in lean management led to plant closures, job losses and a cultural revolution

Missed earning estimates in the year 2000Lowered its future quarterly growth estimate to 2%-3%

Lack of immediate results, reduced employee moraleStock prices reduced to 50% within 3 months of the introduction of this new organizational structure

Decentralization of organization led to creation of too many power centers - Unhealthy Competition Forced Adaptation approach with insufficient time for employees to adjust to change

Failure to influence and persuade middle managementLack of communication

Outcomes of change in the Structure

Present Organisational Structure

Aim: To integrate the global scale benefits into the local markets of each country P&G has ventured into.

Benefits:

To focus on:-

Common consumer benefits

Sharing common technologies Facing common competitors

Global Business Services (GBS) set up so as to provide best support services at lowest possible costs

Lean Corporate Functions to ensure ongoing functional innovation and capability improvement

Revised Organisational Structure in 2013

Pertaining to declining operative income between 2009-2012 , P&G engaged its former CEO Mr. A.G. Lafley back in May-2013. Furthermore, the company restructured its GBU model as shown below:-

P&G went along the Structural approach with a Performance driven organisational change to make their products more customer centric.

Benefits:

To have:-

Industry-wise geographic focus

Better market penetration Resources used for expansion

opportunities

- Unilever was organised on a decentralised basis.

- In Europe the company had 17 subsidiaries in the early 1990s, each

focused on a different national market- The structure allowed managers to match product offerings and market

strategy to local tastes and preferences.- To drive localisation, Unilever recruited local mangers to run local organizations.

- In 1990s competitive environment was changing.

- Emergence of a single market European Union in 1992.

- Allowing manufacturing of certain items at favourable central locations.

- Some of Global competitors moved more rapidly to exploit those changes in competitive

environment.- To re-establish a fit between competitive environment, Unilever had to embrace the

difficult process of strategic and organisational change.

Decentralized Unilever

Why we need a new organizational

structure?

Current Structure The day to day operation are supervised

by the National Management comprising the Vice Chairman, Managing Director (HPC), Managing Director (Foods) and the Finance Director.

Each division is self-sufficient with dedicated resources and assets in sales, marketing, commercial and marketing.

In marketing, each category has a Marketing Manager who heads a team of Brand Managers dedicated to each or a group of brands.

Unilever grouped its worldwide operations into 2 global divisions. Foods and Home and Personal Care. It uses the worldwide geographic area structure.

Reduced number of SKU’s Focus towards improving margins

rather than sales growth

Strategic AnalysisStrategic Response

• P&G: Normative ( Response based on professional standards )• Unilever: Coercive ( Response based on compelling pressure from the

environment ) Change Management Strategy• P&G: Normative Re-educative ( Focusing on long term goals )• Unilever: Rational-Empirical ( Operating within the limitation of resources )

Strategic Topology• P&G: Prospector ( Adopting in fast changes

Loose Structure Decentralized control Currently changed to Analyser topology )

• Unilever: Analyser ( Believing in stability and changes as well Moderately centralized control Tight control over current strategies )

Strategic Approach• P&G: Reconstructionalist ( Fast changes

Delivery in radical change Currently changed to Structurist Approach)

• Unilever: Structurist ( Slowly imposing change within the organization )

Future Prospects - Complete dependence on portfolio approach may not be a viable option- Continuous change may lead to miscommunication of goals and strategy

- Complete dependence on value approach may not be a viable option- Offloading low selling SKUs inhibits growth by diversification- Multiple parent companies may lead to cultural conflict

Recommendations- Good and healthy communication about company’s strategies with employees. Empowering employees inline with the company’s strategies.- Building a corporate culture as per the strategies of the company- Organization must focus on increasing resource base- Focus must be given on value based approach by developing core competencies