Procter & Gamble was founded in 1837 in Cincinnati, Ohio by British immigrants William Procter and James Gamble. Over the years, P&G grew and established various organizational structures, including international sales divisions in 1948 and individual operating divisions in 1954 to manage growing product lines. In 1987, P&G adopted a matrix reporting structure. In 1998, P&G announced a six-year restructuring plan called Organization 2005. There is debate around whether Organization 2005 should be dismantled or continued. P&G must also continually innovate to remain successful and consider the best approach to international expansion through joint ventures or acquisitions.

2. HISTORY
•On October 31, 1837, Procter & Gamble was created.
•founded by William Procter and James Gamble, both
from the United Kingdom
• headquartered in downtown Cincinnati, Ohio, United
States

3. Growth through the Years using
different organizational structures
•In 1948, P&G established its first international sales division to manage its
rapidly growing foreign businesses.
•In 1954, P&G created individual operating divisions to better manage
growing Product lines of products, supported by its own line and staff
organizations.
• In 1987, the matrix reporting structure entered the scene, whereby
functional leaders reported directly to their business leadership and also had
a dotted line reporting relationship to their functional leadership.
•In 1998, P&G announced a six year restructuring plan called organization
2005

4. Whether to make a strong commitment to
the organization 2005 or dismantle.
A.G. Lafley should consider dismantling the structure after a careful analysis
of the previous structures of Proctor and Gamble and a thorough assessment
of the negative adverse effects of Organization 2005 so as to develop a more
effective global structure.

5. Can P&G Reinvent Itself?
“The problem with being an innovative company is
that you can never stop innovating,”
•Connect & develop placed a high priority on the “connections” but
Not much emphasis on developing breakthrough innovations.
•Home run approach, the “singles” strategy failed to develop
Sufficient sustaining business

6. Is International Expansion Through a Joint Venture or
Foreign Acquisition Right for P&G?

7. Seven global business units (GBUs) based on product
categories replaced the P&G’s four geographic
business units
Geographically based structures:
•key advantages of widely spread markets can be catered for,
local knowledge of customers, labor market and distribution can be
utilized
•key disadvantages as with any attempts at decentralization are
associated with the inevitable tension that develops between
Head office and the regions concerning priorities for action and
priorities for scarce company resources.