P&G is considering restructuring its Global Business Service (GBS) units which include finance, customer service, employee services, purchasing, IT, and technology services. The CEO states they need to evaluate partnering or outsourcing non-core functions to better support product development and commercialization. The document evaluates options like keeping operations in-house, spinning off into a separate company, or outsourcing to multiple agencies or a single agency. It recommends outsourcing to a single large partner that provides cultural fit and secures many jobs, or spinning off until such a partner is found, as outsourcing is inevitable for cost competitiveness.

1. Global Business Service
Strategic Restructuring
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2. Introduction: P&G Global Business Service(GBS)
Values:
• Leadership
• Ownership
• Integrity
• Passion for Winning
• Trust
Principles:
• Respect for all Individuals
• Inseparable interest of
company & individuals
• Strategical focus on work
• External focus
• Value personal mastery
• Mutual Interdependency
Relevant in decision-making
It consists of the following units:
• Finance & Accounting Services
• Customer logistics & financial services
• Employee Services
• Purchases
• Information Services
• Technology Services Worldwide
Statement of A. G. Lafley, Chairman & CEO:
“We are a development and commercialization company. That’s really what we
do. We develop and commercialize brands & products. So we need to evaluate
networking or partnering everything that is required to support a development &
commercialization company ”
Concerns:
• GBS is not a core function.
• Competency on par with global BPO operations on scale, focus & expertise
• Cultural fit with outsourced providers, if outsourced
• Managing employee reactions
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3. SupportsGrowth
Job
Insecure Secure
LowHigh
Evaluating Options
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In-house
Strengths:
• Less conflict with the core values
• Develop dept. further
Weakness:
• Huge investment
• May not be capable to support growth
• Distract P&G from core business
Spin-off:
Strengths:
• Higher levels of service & lower cost
• Maintains corporate culture & values
Weakness:
• No expertise in competing globally
• Distract P&G from core business
Outsourcing to Multiple Agencies
Strengths:
• Easy to outsource to best in breed partners.
• Superior service & innovation at lower cost
Weakness:
• Complex to manage multiple agencies
• Very difficult to find culture fit
• Jobs will be highly insecure
Outsourcing to Single Agency
Strengths
• May prevent job loss.
• Create competitive edge to the core functions
• Superior service & innovation at lower cost
• Easy to manage
Weakness:
• Difficult to find one large outsourced partner
• Cultural integration

4. Recommended option
• Outsource to single agency, provided P&G
• Gets the right cultural fit partner
• secure as many jobs as possible with the outsourced
partner
• as early as possible, since outsourcing is inevitable
looking at the global cost competitiveness needed in the
long tenure.
• If P&G couldn’t get the right partner, then it may
go for spin-off, until P&G find a single agency.
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5. Signs and signals – organizational change
• Business environment changing much faster & far less
predictably than in past
• Flexibility demanded from managers & leaders
• Expectation of high growth
• Highly productive and cost-competitive outsourced
BPOs in the market which can support P&G at lower
cost and provide competitive edge.
• Focus on core competency.
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6. Communication about this change to employees
• Global market place changes.
• Its impact on P&G & the need for change.
• Focus on core competency & business expansion & growth in
new markets
• Communicate the options to the employees about the various
severance packages & options to safeguard the interests of
employees.
Communication timing:
• Communication should be started early providing early
indicators of change.
• No official communicate about the change to the employees till
the finalization of outsourcing contract.
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