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Organizational Structure comparision | Proctor & Gamble and Unilever
UM15002 Alisha Johney
UM15013 Ashish Parakh
UM15036 Priya Ranjan Mohanty
UM15046 Shilpi Agarwal
UM15054 Shree Kumar Sahu
UM15056 Syed Shaz Areeb
- A comparative analysis of the
P&G’s Roadmap1987: Matrix Structure
39 US product category Bus
were created run by General
grew 40% since
2000 and stock
1995-99: Global Matrix
Extended to rest of the
4 regional presidents
were reporting directly
Biggest upheavel in P&G history
Focus in lean management led to plant closures, job losses and a cultural revolution
Missed earning estimates in the year 2000
Lowered its future quarterly growth estimate to 2%-3%
Lack of immediate results, reduced employee morale
Stock 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 management
Lack 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.
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
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.
Industry-wise geographic focus
Better market penetration
Resources used for expansion
- Unilever was organised on a decentralised
- 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
- 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.
Why we need a new
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
Reduced number of SKU’s
Focus towards improving margins rather than
• 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 )
• P&G: Prospector ( Adopting in fast changes
Currently changed to Analyser topology )
• Unilever: Analyser ( Believing in stability and changes as well
Moderately centralized control
Tight control over current strategies )
• P&G: Reconstructionalist ( Fast changes
Delivery in radical change
Currently changed to Structurist Approach)
• Unilever: Structurist ( Slowly imposing change within the organization )
- Complete dependence on portfolio approach may not be a viable
- Continuous change may lead to miscommunication of goals and
- Complete dependence on value approach may not be a viable
- Offloading low selling SKUs inhibits growth by diversification
- Multiple parent companies may lead to cultural conflict
- Good and healthy communication about company’s strategies with
employees. Empowering employees inline with the company’s
- 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
- Focus on M&A-Target unexplored market and improve innovation
- High concentration on Emerging markets
- Focus should be given to maintain a common standard for all units.