Case study answers

1. PROCTOR AND GAMBLE
ORGANIZATION 2005
Presented by- Group 3
HimanshuTalmale – 20DM084
Manish Jindal – 20DM114Mihir
Manchanda –
20DM120Mohammad Sohail –
20DM122Pallavi Goel –
20DM147Piyush Hirwani –
20DM151

2. Organization History
1837- Company was founded in Cincinnati
1859- P&G sales reach $1 million
1879- Ivory soap was introduced
1924- P&G was the first one to create market research department
1955- Crest, the first toothpaste with fluoride was introduced
1980 - Sales reach $10 billion
2005- High frequency stores, consisting nearly 20 million stores
across the world
2021- P&G operates in more than 80 countries

4. Why did the US organization structure shift from
product groupings in the 1950s to matrix
organization in 1980s?
• Requirement of Differentiated Functional Activities
• Setting up matrix reporting structure
• Dotted line reporting

5. Why did the European organization structure shift
from geographic grouping in the 1950s to category
management in the 1980s?

6. Why were the two structures integrated into a
global cube in 1990s?
• Attractive expansion opportunities in Japan and the developing markets
• Positive results in the area of innovation
• Tremendous top-line and bottom-line improvements
• a stronger global sales organization with regional leadership

7. What are the key distinguishing features of
Organization 2005?
• A new system with mixture of interdependent organization eliminating the old matrix system
• Focus on cost
• Formal and standardized processes
• Leaner organization with less employees and fewer management layers
• Some of the tasks/decisions were assigned to individuals, previously being decided upon by the committee to reduce the
time taken.
• Three major separate organizations
• Global Business Unit focused on products
• Market Development Organization focused on Markets
• Global Business services focused on internal business processes

8. Why did P&G adopt matrix structure?
• The matrix structure had never been symmetrical
• The matrix structure had also not fully resolved the tension between
regional and product category management.
• Thirdly, competitors were catching up quickly
• Couldn’t fully manage functional strategy and resource allocation

9. Should Lafley make a strong commitment to
keeping Organization 2005 or should he plan to
dismantle the structure?
• It had slammed four profit warning into two quarters. (Earning had dropped
by 18%)
• The stock prices had dropped by half in the last six months- losing 70$ billion
market value.
• Lack of immediate results coupled with substantial job reductions and
decrease in morale of employee

10. Thank you