You are on page 1of 4

PRINCIPLE OF MANAGEMENT

ASSIGNMENT
A case study on Procter and gamble TARUN SOLANKI, ROLL NO 39

PRINCIPLE OF MANAGEMENT

CASE STUDY (From 5th September 2010, Gujarat samachar)

INTRODUCTION
Founded in 1837, Procter & Gamble is one of the largest consumer products companies in the world. In fiscal year 2007, it had annual revenue of US$ 68.2 billion, and ranked 74th on Fortune 500 list of the world's largest corporations. P&G has operations in more than 80 countries, with more than 300 brands on market in 160 countries. These include beauty care, household care and Gillette products. Three billion times a day, P&G brands touch the lives of people around the world. P&G Greater China business includes Mainland China, Hong Kong and Taiwan, which were established in 1988, 1987 and 1985 respectively. Procter & Gamble entered Mainland China in 1988 by establishing its first joint venture P&G (Guangzhou) Ltd. Headquartered in Guangzhou, P&G China currently has operations in Guangzhou, Beijing, Shanghai, Chengdu, Tianjin, Dongguan and Nanping, and a technical center in Beijing.

CASE
The CEO of P&G, Dirk Jager, had left after a mere 18 months in the job. In March, the company announced it would not meet its projected First quarter earnings. The stock price was spiraling downwards falling from $116 in January to $60 per share by March. The massive loss of $85 billion in market capitalization was matched by the loss of condence within. In the 1990s, Dirk Jaeger was the CEO of P&G. He started a company changes. Currently, the AG Laphaley is company's chief and he also keeps the company changes. Dirk jager said that while making changes that these are the biggest changes that will help in new innovation. It will increase the speed of supply and there will be rapid growth of the company. dark Jager have keep in mind this matter they have created seven divisions. The divisions cover the international market. They also

Department of business and industrial management

Page ii

PRINCIPLE OF MANAGEMENT

centralized the company's accounting and other departments. They standardize Manufacturing means that a similar method. So production method of factories will become same in different countries. E.g. up to now Company using 12 different types of equipment and methods for its Baby Diaper now only one method has been adopted. Company is always looking for improvements in its products and the production methods for the development of company. But this is all a result of the company's employees dissatisfaction arose update. The company began estranged. Jaeger after only 17 months of operations to remove them from the board and their place in AG Laphaley placed. The company's existing CEO Laphaley had adopted different approach to bring changes in the company. The company has developed a strong foundation on Procter & Gamble's two world-famous, brand - Tide (detergent) and pampers (diapers),. Along with the market also began to propose new brand. So far, the company does a new product development within the company. Laphaley had taken a step to import new technology from outside. The reorganization process is also started in the company's head office. He removed the Division president terms. He arranged this president to managed close relationship with their team. He made their offices open so that team members can get them immediately. He cooperated with the team and working with the development of culture. He realized this work without creating grievances among employees. Why was this? The principal reason for this was found in Differences between management styles of two CEO. Jaeger is very aggressive and rough speech, while laphaley is cohesive in speech. Jaeger business with the following managers rudely, when laphaley honorably. Jaeger spoke more and listened less, while laphaley listened more, and then turn to speak. laphaley by explaining his Philosophy of changes, said'' the first thing that the speed of changes is increased. It is ubiquitous and its impact on the lives of all consumers. It also affects the industry and our businesses. These changes cannot be prophecy. In this context you have only three options are that to avoid changes that ruin your business the only option you have is that to provide the leadership to changes. Especially, when you will have some competitive advantage from this strategy. I strongly believe that the leaders are really the leaders of change.'' This view laphaley keep at glance and make many physical and symbolic changes to their company, so the company understands that employees are our true Business Change Leadership.

Department of business and industrial management

Page iii

PRINCIPLE OF MANAGEMENT

Analysis of this case: Here you will come to know that how the management style of laphley is different from his predecessor CEO Dirk Jaeger management style. Laphley listened to their managers carefully. When Dirk Jaeger make little effort to understand the others point of view. Jaeger was not staff centered when laphley is staff centered. The Similarity in both CEO is that they both are committed to bring fundamental change in the company. Dirk Jaeger made infrastructure and the manufacturing related changes. He removed the company`s division president term, but it does not specify other than what is manageable. He reduced the power of field managers of the company's by centralizing accounting and other department and have increased the power of some managers. But due to employees job dissatisfaction he has been removed. Laphale believes in 'open communications' and tried to remove the centralize power between the head of different departments. He also brought in new technology from outside and developed new products. In America if The Companys head does not shows the activeness the board of directors removed him from his place. In this case, only in 17 months Dirk Jaeger was removed from by board,. In short, in the western world, not your relationships but the efficiency of person help to maintain your job.

There is difference Between Indian and American institution building. Western countries believe in making perfect organization. In India people are focusing on to make themselves perfect rather than organization. Western people consider Creation to their own organization and consider the progress of the expansion is to the personality of the organization when in India the organization was eaten away by their creator. This does not apply to all organizations builder but some who exploits the organization.

Summery
Three things are clear from this case (1) changes faced by each company. (2) Changes in the external environment (which does not pass on any of the company) used to increase the speed of globalization. (3) Therefore, each leader must have a Change Leader. Leader can manage the change that is now considered to be a true leader.

Department of business and industrial management

Page iv