Table of Contents
Context of the Company's Organizational Structure Recommendations for Theory of Organization Power Assessment Conclusion References
The business segment's competitive market of today offers customers a selection of items and potentially favorable propositions. However, for the unit to achieve a profitable position in the field, it is of the utmost necessity to build correct organizational structure patterns. Various scholars have defined a series of organizational structures that businesses might use to implement a quality policy in order to simplify the subsequent duties. Researchers define organizational structure as "the framework of the interrelationships between jobs, systems, operating procedures, people, and groups striving to achieve objectives" (Ahmady et al., 2016, p. 455). Consequently, the organizational structure represents the methods by which a company unit might split duties in order to achieve its goals.
For a more comprehensive understanding of the aforementioned concept, it may be useful to examine organizational structure patterns in order to identify its fundamental work patterns. Additionally, one could argue that it would be advantageous to concentrate on the structural peculiarities of a large firm and its extensive organizational features. Therefore, the purpose of this research is to undertake an extensive investigation of the Procter & Gamble (P&G) Company's organizational structure.
History of the Institution
People from all over the world frequently do not pay attention to the brands and categories of products they use daily. Tide, Gillette, Always, and Head & Shoulders, for instance, are household names and self-care products that virtually everyone in the world is familiar with. However, only a small number of people consider the global context, which connects all of these concepts into a massive multinational organization, Procter & Gamble Company. In terms of its total product typology, P&G operates in six primary categories: beauty, grooming, health care, fabric & home care, and feminine & family care (Procter & Gamble Co., 2020). Therefore, the company serves clients from across the globe with branded products pertaining to the aforementioned market category.
P&G Co., with headquarters in Cincinnati, Ohio, and subsidiaries throughout Africa, the Americas, Asia & the Pacific, and Europe, claims to be one of the most well-known consumer goods firms in the world. Since its founding on October 31, 1837, P&G Company has held a strong competitive advantage in the market for more than 180 years (P&G, 2020). During this time, not only has the company significantly improved the quality of its product, but it has also launched a number of environmentally and socially conscious projects. This advancement would not have been possible without the hard effort of the staff. P&G recruits a variety of executives that are accountable for all global segments. The primary management jobs are then subdivided into human resources, accounting, and sales, each of which plays a vital role in the communication between the top management and all employees. The total number of staff workers is 97,000 individuals.
To determine the organizational structure type of a particular business, it is necessary to examine the theoretical foundations of the issue. Initially, the concept of an organizational structure can be evaluated from a variety of angles. Theorists claim that the major categories for structures are physical and social interactions (Ahmady et al., 2016). In contrast to the former, which are concerned with the connections between units such as subsidiaries and the overall geographic location, the latter are concerned with the interpersonal interactions between individuals. When determining the working organization, these components should ideally reach a consensus in terms of collaboration. For instance, organizational relationships can be viewed via the lenses of hierarchy, function, and inclusion (Ahmady et al., 2016). These are associated with the order in which units are arranged inside an organization, taking into account the measurable consequence of the structure and the extent of direct communication between the top management and other personnel. Particularly, the aspects of organizational structures pertain to how managers should oversee the unit, the roles of employees within the hierarchy, and the processes that generate managerial patterns inside the group.
Regarding organizational structure types, the concepts of social structures and social forms are taken into account. The classifications of social structures are simple, functional, multidivisional, matrix, hybrid, network, and bureaucracy (Ahmady et al., 2016). Given the size of the P&G organization, it goes without saying that basic structures cannot support the business, necessitating a complex strategy. The social structure most likely to meet the expectations of the company is the matrix, which requires the integration of functional and multidimensional work frames in order to split the responsibility among the units. It has already been stated that the corporation's leaders utilize a complex hierarchy structure to manage each subsidiary.
Instead of connecting directly with upper management, each local executive in a matrix system conducts functional structure within the unit and then reports the results. (Lukinait & Sontait, 2017) Hall classifies matrix organizational structure as having many managerial authorities that can work with one another, thereby leaving the responsibility to the functional managers of each enterprise's department. With this description in mind, it is easy to summarize the primary benefits and drawbacks of the matrix organizational structure in the context of a large business.
Consequently, the advantages of this system include:
Flexibility. By delegating a great deal of authority to the local administration in the company's subsidiaries, it becomes simpler for them to implement innovations and address problems without consulting with the administration. However, such autonomy is achievable unless it involves taking extreme actions; Absence of red tape. When dealing with the management of a major organization, the hierarchy typically consists of multiple layers. When implementing adjustments to the existing system, such a position ladder becomes particularly apparent. In order for the proposed intervention to be successful, management must wait a lengthy period for the project to complete all stages. Nonetheless, once the matrix system is implemented, some of the modifications may be added to the subsidiary; Teamwork mentality. One of the primary objectives of management inside a business is to ensure effective team communication in order to boost overall productivity. However, when working with a company as huge as P&G, it is nearly impossible to maintain a family-like atmosphere. Consequently, a big number of employees are divided into smaller groups that could potentially bond with the assistance of the supervisor (Gleeson, 2019); Efficient HR utilization. It is difficult to conceive of a fair and advantageous workload distribution for a multinational firm with about one hundred thousand employees. However, the smaller the team, the easier it is for management to monitor both the team's overall and individual production. Consequently, subsidiaries handle their personnel in a manner that maximizes the company's profit and growth with the aid of a thorough analysis of human resources throughout the working process; New viewpoints. While the organization is led by a single functional management team, there are few opportunities to increase productivity. In terms of gender, age, socioeconomic status, and geographic location, however, P&G's target consumer is extremely diverse. With local leaders in many locations, there is a strong possibility that new ideas and strategies will emerge (Gleeson, 2019).
Once the potential good effects of adopting a matrix organizational structure are pretty evident, it is crucial to define some of the major structural shortcomings to function based on factual comparisons. Thus, the disadvantages consist of:
Potential for disagreements Despite the fact that matrix structure entails a high degree of autonomy for local governments, a few of the challenges have a common aspect. In such situations, the greater the number of functional managers inside an organization, the greater the likelihood of a conflict of interest between the units. Moreover, in the event of a conflict, employees are placed in the middle without the ability to support any option (Gleeson, 2019); Unhealthy competition. In a matrix structure, functional and general managers are expected to have an equal impact on the enterprise’s operations. Despite the fact that functional managers can regularly witness the process, they believe they have more decision-making authority. As a result of their lack of direct involvement in the manufacturing process, general managers, on the other hand, view themselves as being extremely important. Despite the fact that in such situations, managers are expected to establish a consensus for the sake of the company, these talks frequently end in implicit competition that damages both employees and the enterprise in general; increased complexity. It was said in the description of the system's benefits that the matrix's opposition to bureaucracy facilitates the introduction of fresh approaches to the system. Nonetheless, a range of managers could also contribute to the overall sophistication of the communication. On the example of P&G, one may see that each subsidiary employs functional and general managers who report to the company's executives. With such a system, employees may encounter challenges when reporting productivity.
Consequently, it was proven in the discussion that, despite the fact that a matrix organizational structure may have a number of disadvantages, the productivity benefits are far more prominent. To preserve this result, however, functional and general managers, as well as the corporation's executives, must recognize the extent of their duty in terms of consumer and employee satisfaction.
The Organizational Theory
Behind all of the current organizational structures are theories of organizations that inspired these methods. The course covered contemporary, classical, and neoclassical theories. The classical theory of organization posits that an organization is comprised of four basic components: activities system, people, cooperation, and authority. Regarding the examined company's history, one may deduce that the classical approach to organizational structure is important to P&G's management principles.
In addition, the theory's primary objective is a rationalized system of responsibility differentiation, which is evident when examining P&G structure (nday, 2016). However, while the purpose of this theory is to provide the basis of an organizational structure, it goes without saying that the majority of principles are strengthened and modified in the present day. In this manner, the business is able to meet both the needs of its clients and the expectations of its staff. Consequently, some of the key concepts of contemporary organizational theory are also included into the P&G labor culture. For instance, the organization promises to focus more on the individuals than the responsibilities they play on a team. In addition, the concept of a team is adjusted to ensure that the personnel is divided into groups small enough to ensure an efficient and productive atmosphere.
P&G, as one of the segment's most influential firms, possesses a sophisticated corporate structure and patterns of power distribution throughout the organization. From the perspectives of business units and board structure, the whole structure can be evaluated. P&G is often organized into six business units, each specializing in a separate segment of production. Each of the business units has its own sphere-specific executive leadership. The latter classification, however, is concerned with protecting the company's beliefs and principles. Thus, governance is carried out by twelve board chairs, each of whom is accountable for a specific area (P&G, 2020). In accordance with geographical dispersion, the firm is also run by the local management.
The degree of responsibility required to manage a large organization is frequently incompatible with human capabilities. In order to effectively assign this responsibility among employees, functional management, and general management, a matrix organizational structure was developed for this goal. However, there are disadvantages that must be addressed in order to boost production. The initial suggestion relates to further organizational customization. Indeed, a shared objective for the team is one of the most important success pillars when it comes to motivating personnel. The global spread of P&G necessitates a unique strategy that takes into account the characteristics of culture and place. Increasing the general level of intervention in the company's working process is an additional recommendation of significance. With a broad authority model, personnel and administration are primarily focused on the processes occurring within their unit without regard for the big picture. Therefore, it would be highly advantageous to implement intervention visits between the business units in order to build stronger patterns of cooperation in the future.
The organizational structure has become one of the most important components of any business, since it defines the communication and work patterns within the organization. As a result, the Procter & Gamble Company was evaluated in terms of the following article in order to discuss the uniqueness of such organizational systems. During the conversation, the organizational structure of the business, as well as its good and negative characteristics, were defined. In addition, the theoretical foundation of the structure was investigated in order to develop suggestions for productivity increase. Future ramifications of this study may include evaluating the firm using a different approach to organizational patterns in order to undertake a comprehensive comparative examination of the structures.
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Gleeson, P. (2019). In corporate organizations, advantages and downsides of matrix organizational systems.
Lukinaitė, E., & Sondaitė, J. (2017). The mentality of employees working in a matrix organization. 18(144-151) Business: Theory and Practice.
Őnday, Ő. (2016). Classical organization theory: from Socrates' general management through Weber's bureaucracy. 4(1), 87-105, International Journal of Business and Management Review.
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The Procter & Gamble Company (2020).