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Management of change at Procter and Gamble Case Study

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Updated: May 15th, 2019

A descriptive case study of Procter and Gamble

A brief background of Procter and Gamble

The current staffing issues facing the accounts department at Procter and Gamble are very relevant in determining the strategies, structures and practices to be assumed in order to achieve and manage change in order to meet organizational objectives. The efforts towards ensuring that an organization is cognizant of staff issues is a major step in determining the ability and levels of successes that will be realized via seeking the best strategies of addressing the issues pro-actively.

Being a worker at Procter and Gamble, I noticed a major management problem in the area of staffing since the staff working in the accounts payable department did not have adequate knowledge of the work they were to carry out.

This problem gave rise to accumulation of work load, high stress levels, dissatisfactions and eventual quitting of work by managers in the department as well as some staff. In my view, organizations should regularly review and harmonize their management strategies with organization learning and communication to cohere with the highly dynamic business systems.

Procter and Gamble is a leading American multinational company that manufactures and sales wide range of goods to its consumers in over 180 countries. Its channels of primary sales are drug stores, membership club stores, grocery stores, and mass merchandisers. It has several business segments some which include family care segment whose brands are pampers, Charmin, and bounty.

The products from this segment include paper towels, facial tissues, diapers and bath tissues. Other segments include homecare, snacks and pet care, healthcare, grooming and beauty segments. The latter manufactures products that include skin care products, prestige fragrances, personal cleansing, hair care, deodorants and cosmetic products.

In the period between years 2000 to 2007, Procter and Gamble’s organic sales growth was marked at 6% with a growth of 13.9% in its earnings. Its growth in terms of sales has massively grown, a consideration that is reflected by its sale of $ 82.6 in 2011. Procter and Gamble has been able to establish its competitive edge via differentiation of its offerings. It leadership has devoted finances and time to research and development with an aim of creating new products needed by consumers.

In addition to research and development, the company has invested heavily in enhancing relationship with retailers and learning consumer behaviours. This has been effective in helping it understand the needs of consumers and improve its products. As a company, it is decentralized with each segment focused on the country it is situated. While these strategies reduce overhead costs, its local and global scale focus have been some of the key pillars in gaining competitive advantage.

Procter and Gamble staffing and change management

Change management is the most important tool for modern organizations’ demand to increase productivity and profitability. It acts as the link between the organization and its future by deriving the necessary visionary demands for progress. Besides, it forms the main platform upon which all aspects of revitalizing productivity are established.

The ability of Procter and Gamble to profitably operate is based on its overall capacity to harmonize its strategic operations in a manner that coheres with its inherent culture.

Following the high demand for the products and the insatiable quest for more profits by consumers and shareholders, many employees working in the accounts payable department were recruited and established hurriedly and therefore the management overlooked the general proficiency requirements. Since this department requires processing and maintenance of account payable transactions, it became impossible for the current staff to manage the work.

The problem of staffing where I work was not a major problem immediately after the establishment of the company until in the last few years when the efficiencies of the accounts payable department started to decline. The problem was attributed to the fact that the members of staff operating in this department were not well conversant with data entry, computer applications and general accounting practices as well as accounts payables.

Most of them could not handle the jobs given to them and therefore could not meet work expectations. This problem eventually led to the others such as dissatisfaction with work, excessive work loads and high stress levels. The problem which was initially thought to be minor escalated into a major management issue.

One of the observations I made from the situation was the negative effect of the problem reflected in reduction in morale of the workers, a notion that has threatened the whole company with stagnation due to lack of commitment, innovation, and creativity necessary to ensure the highest possible quality of work in the department.

Emerging difficulties –organization staffing and management problems

Lack of training/ organization learning

Training acts as the best platform for acquisition of new skills. The latter is dependent on factors that directly affect personal change at all levels. The problem facing Procter and Gamble’s department of accounts payable is that it failed to provide an opportunity where its staff would be able to understand their deficits and therefore move with vitality to address them.

The lack of training for workers in this department indicates absence of emphasis that an effective person must be able to relate institutional requirements or objectives with organizational demands. This viewpoint is of great importance in the industry as skills require specified application on a market that is highly dynamic.

As a worker in my department, institutional training enabled me to figure out how to perform my tasks effectively and conduct real-time simulations. Since most workers at Procter and Gamble were suffering from stress, I understood well enough the need to comprehend the market dynamics.

Most workers in the accounts payable department at Procter and Gamble have great expectations, but they fail to maximize on their input in raising value due to inadequate skills. Though it is largely the role of the management of Procter and Gamble to motivate its employees, important skills in processing and maintenance of account payable transactions are very crucial in order to enhance performance and reduce work loads.

Resistance to change due to recalcitrant leaders

Another difficulty that I observed in the department I work in is resistance to change among leaders. The act of streamlining the accounts process is a new concept and the management at Proctor and Gamble is not used to it. The calls for such changes culminate to major misinterpretation, misunderstanding, and misrepresentation of the concept at the lower levels of the organization’s operations.

Besides, the organization’s staff appeared to have assimilated internal subcultures that often further deliberate major issues that affect them especially when they are being addressed by the management. Notably, the internal subcultures of the organization appear to be strong since there seems to be robust resistance towards implementing change.

Communication

It is my view that all aspects of an effective change process can only be articulated in the presence of good communication at all levels of the process. As indicated earlier, one of the major barriers that Procter and Gamble accounts payable department staff and the company management lack is effective communication. Communication has a great potential of undoing any barrier. Effective communication is a holistic inculcation of the necessary identity with current issues facing an organization.

The major difficulty that has been in this company where I am working is lack of communication between leaders and subordinate staff. The change group and the management of Procter and Gamble does not engage in direct communication with staff at all times since any slight process of change takes long time before it is accomplished.

Indeed, I appreciate the expected difficulties that may be encountered while employees are working in account payable department. However, lack of communication among leaders at Procter and Gamble and the concerned department is a major issue.

Areas that needed change and application of Morgan’s mental model

Organizational change has become an important aspect in management of businesses since it provides an organization with opportunities to enhance its overall performance. As such, theorists have developed models which have been of utmost importance in providing the way forward in accomplishing change. One such theorist is Gareth Morgan who developed the mental model. This model is very crucial in determining areas which Proctor and Gamble should change.

Organizations as machines

Morgan uses the metaphor organizations as machines to reflect how management should think of an organization to derive change. The leadership at Proctor and Gamble needs to ensure that its staff at the accounts payable department acquires efficiency of high levels just like machines. It needs an effective staff that will work with a machine-like efficiency. This will be attained by adding value to employees and especially the accounts payable department.

Notably, the vision of the company had remained vague for a long time with its values being equally ancient and perhaps inapplicable or undesirable by the staff and consumers. Its managers have relied on the fundamental metaphor and ignored the idea that the staff in the affected department needs to be machine-like to enhance profitability.

An organization as brains

The brain of an organization in implementing change is critical in creating networks. The problem facing Proctor and Gamble can be eradicated when the model of employing the aspect of brain is applied in the affected sector. Its leadership should cultivate knowledge, requisite variety, feedback, intelligence, mindsets, distributed control and learning as strategies in curbing the work overload, stress among workers and lack of skills.

The capacity to grow at Procter and Gamble is based on its ability to bring into play organizational learning to enhance the brain of its staff and inculcate best staffing systems for sustainability and success.

An organization as an organism

A business organization is similar to an organism. Therefore, it needs to change, evolve and survive in order to gain a competitive edge. It is through viewing Proctor and Gamble as an organism that the problem of management and staff’s capacity to deliver in the accounts payable department will be addressed. This will provide a platform for understanding that the business is an organism that can be born, grown, faced challenges and eventually die.

Proctor and Gable must have organism-like and machine-like characteristics, understand its staffs’ weaknesses and strengths and make improvement through training. As indicated in the case study, a new initiative can be established when the performance is poor and the organization which is on a negative progress to aid in restoring it back to the profitability tract. New initiatives can also be assimilated when an organization is stalling and require re-energizing for better development

An organization as a political system

An organization’s system brings out the necessary cohesion among departments and also culminates into better performance quality. Procter and Gamble should introduce an effective leadership structure that is internally oriented to ensure that it puts across the emphasis of staff learning.

As indicated earlier, there is need to ensure that the accounts payable department’s performance remains ahead of others as a mode of keeping the department effective. Organization learning should also be attached to innovation with the rewards being very high.

An organization as culture

Success in an organization has been cited as a factor that is determined by the culture whereby management and staff’s demonstrate the ability to work together in a harmonic mode. Notably, it is this coterminous harmony that emphasizes the need for learning to develop skills, quality and customer value.

Therefore, it is necessary for Procter and Gamble to establish an organization’s guiding values and principles since they help in adding quality and defining an organization especially in terms of organizational learning. There is need for the management at Procter and Gamble to appreciate that lack of skills in account payable tasks is perhaps the main cause of its downward trend. The aforementioned features will form the most important culture of the organization.

Organization as flux and transformation

A constant change is crucial for Proctor and Gamble to experience the much needed change. It came out clearly that this organisation was peculiar in the sense that it relied on the ability of the staff and employees to handle the functions of the account payable department. The staff should be held fully responsible for all the transactions between the business and the consumers of its services.

Most importantly, organizational transformation through staff learning and limited complexities will dictate the need for team work in all the operations as a major facet of improvement and seeking alternative as well as most effective systems that would guarantee the highest returns.

The management of Procter and Gamble should make the staff understand that the department is a single unit and that only cooperation and learning between the staff and all the departments would assist them in achieving the required results.

Through team work, it becomes possible for all the staff and employees to part of the engine that drive the business towards profitability. Arguably, it is through flux and transformation that members of the staff and other employees will be able to derive identity after understanding that their contribution is being appreciated.

Some of the areas that were changed

The problem facing the account payable department at Procter and Gamble has been a major source of concern that has created the need for change. One such change has been through encouraging works in the department to become change agents. It is in this respect that continuous improvement among employees has become an integral part of the change process. The staffs in the department have been allocated the role of instilling continuous change in the process and in the bank too.

Besides, they alongside the management team will seek to identify any creativity and innovative consideration by the members of the change team and the organization as a whole. It is worth noting that plans have been set up to ensure this team undergoes special training to ensure that they develop the necessary skills for the hard task.

Besides, together with the management, they will seek to ensure that the business remains sensitive to the needs for better customer value, staff motivation, and better communication between the company’s staff and the management.

Main learning points

One of the key learning points from the study is that a desirable change in a company is linked to the approach a management adopts towards addressing the different cases of employees’ problems. There is need for the management to change its attitude towards the employees from a mechanistic point of view to increase their performance.

Besides, it is also desirable that a link between accounts payable department and the management is achieved to reduce such a problem recurrence in future. The law requirements should also be followed to avoid conflict with the legal system which paints a bad image of the company at the market.

Communication is a core aspect that can enhance better harmony between the team being involved in account payable duties, other staff, middle level management, and the top management in Procter and Gamble. Taking into consideration that Procter and Gamble is organized in a hierarchical mode, effective communication will be a better platform for assessing the change progress and indeed contribute to it.

However, the lack of it has made it impossible for it to ensure that all its leaders and staff offer least resistance which could result from ignorance. With communication, it will be easy to bring the management at the local level where the people assimilate the management roles via contribution to the overall decisions made.

Continuous change is a cumulative system that demands inclusive and continuous analysis of progress as exemplified by the returns in productivity as well as the staff orientation and assimilation of the new approaches. Therefore, a system should involve surveys especially of the short term win-win situations for all new procedures and methods being followed to reduce the time taken, workloads, stress and dissatisfactions.

Besides, there should be evaluations on the basis of the staff’s ability to change and assimilate new systems to welcome more change for improvement as opposed to spontaneous changes. To ensure long term benefits, the system should establish systematic reporting systems for the change team, staff and management to assess the rate of progress.

References

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