Influences of Globalization on Organizational Governance and Leadership at Procter & Gamble

This report discusses the influences of globalization on organizational governance and leadership at Procter & Gamble, including the impact on culture, structure, and functions. It also explores key barriers in doing business internationally and provides recommendations to overcome them. The report concludes with a critical evaluation of Procter & Gamble's strategies and recommendations for organizational structure and decision-making process.

Running Head: GLOBAL BUSINESS ENVIRONMENT 0
GLOBAL BUSINESS ENVIRONMENT
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6/4/2019

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Contents
Introduction......................................................................................................................................2
Influences of globalization on organizational governance and leadership, structure, culture and
functions at Proctor & Gamble........................................................................................................2
Influence on culture.....................................................................................................................2
Influence on structure..................................................................................................................2
Influence on leadership and functions.........................................................................................2
Decision making for Procter and gamble........................................................................................3
Key barriers in doing business internationally................................................................................3
Recommendation to overcome barriers...........................................................................................4
Critical evaluation of Procter and gamble strategies.......................................................................4
Recommendations for organizational structure and decision-making process................................4
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Conducting business globally provide various opportunities and threats for the company, as each
nation have a different environment which needs to be adopted or abided by the company
working globally. One of the key factors includes the culture of the nation that affects an
organization’s aspect to work in that nation, for instance, organization culture, structure and key
functions. The purpose of this report is to identify the influence of globalization and global
market over the organizational decision-making, strategy, culture, and functions. This would be
done considering an organizational case of Procter and gamble. P & G is a multinational
consumer goods company based in America founded in 1837. The company has the various
product range and sub brands that it is offering in various nations some of the key brands include
Olay, Vicks, tide, Ariel, head and shoulders, Wella and many more (us.pg, 2019).
Influences of globalization on organizational governance and leadership,
structure, culture and functions at Proctor & Gamble
Influence on culture
Procter and gamble key organizational culture has been transformed to be an innovative
organizational culture. There have been globalization factors and influences. Considering the
theory of organizational culture that could actually help an organization to gain a competitive
advantage is one of the complex phenomena and is created in various ways. This may be created
due to challenges faced or may be deliberate development by the company’s management.
Globalization factors that affect the organizational culture of P & G are social factors that are the
social trends of the customers in a particular nation that will affect the culture of the
organization. For example, in a nation like India, the key importance of the company would be
customer relations that need to be built to enhance the sale. This is the reason that the company
decided to go for an innovative organizational culture that will include innovative technology,
product and process to offer to customers from the different nation (Anitha, 2019).
Influence on structure
The key factors of the globalization that would affect the structure of Procter and gamble include
Cross-cultural differences, workforce diversity, and the emergence of global managers. For P&G
to go international lead to a change in organizational structure and the key reason is a cultural
difference in two nations. The cultures elements like language, value, ethics, and believes are
different in every nation. The key factors for Procter and gamble include various product ranges,
which make the organization structure to be divided based on product portfolio, but the
globalization affect the organizational structure of the company in the way that the structured
was required to be based on organizational function as well. Moreover, the company being one
of the leading global consumer goods company are liable to make sure that the structure of the
company are supporting the international requirements and are approachable to the current
business environment in the international market. Moreover, the company adjusts and
restructures its organizational structure over the period. Therefore, due to globalization
implication, P&G has company structure based on geographical divisions, product type
divisions, and functional divisions (Craig & Douglas, 2015).

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Influence on leadership and functions
Figure 1: (Source: (pg.co, 2019)
Similar to the effect of globalization on organizational structure, the effect on leadership is also
significant for Procter and gamble. For leading a group of people, it is important for the leaders
to understand the employees and culture in the respective nations. This could be challenging for
global leaders like global feminine care leader that would need to enhance their capability to
understand different ethics, values, and culture and type of leadership style they can adapt to
make the leadership effective in nature. As presented above due to globalization, the leadership
of Procter and Gamble is also based on the global division basis and product division basis
(pg.co, 2019). The key influence of functions is managing product development, marketing,
operations as per the global market.
Decision making for Procter and gamble
Procter and Gamble have entered into various nations for which the key mode of entering into
international markets is a strategic alliance or joint venture. This largely depends on the global
market where the company is entering. In case the company believes that the company won’t be
able to gain customer trust in the nation, it prefers to go for joint ventures so as to build trust
among the customer. For example, P & G has entered into China market through a strategic
alliance with one of a local Chinese company that is Hutchison Whampoa (Kaur & Ma, 2015).
Key barriers in doing business internationally
1. Political barriers – One of the barriers is a political barrier in case of importing as nations
attempt to increase the export instead of import which may affect the entry of the company to
particular nation (Robson & Zeriti, 2014).
2. Late mover in various nations – The Company has entered into various European and Asian
market in urgency due to its largest competitors that has Uniliver entered those markets at first
place; for example Indian, market.
3. Local leaders – The Company major challenge or barrier in another nation of the entering
nation includes competitors in the exporting nation that are the local consumer goods brands that
people are using since years (Coulson-Thomas, 2017).

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4. Cultural barriers – these are the largest barriers in going international as the culture is the key
aspect that would affect the success factors of the company. This includes religion and language
barriers that are must for marketing strategies of the company and could be challenging (Shek,
2016).
Recommendation to overcome barriers
1. Product innovation – this is one of the key recommended strategies as the company could
increase the number of products and innovation through products like change in product
packaging to target the nation.
2. Abide by legal and political norms – The legal and political environment is different in each
nation, which must be abided by P & G to target the nation and conduct business in the nation.
3. Customization – To overcome the cultural barriers, the recommended strategy for P & G is
customization or localization. For instance, adding local product integration to target customers
of that nation (Ding, 2018).
Critical evaluation of Procter and gamble strategies
1. Global expansion strategy – The Company has been focusing over global expansion strategy
for which the company has entered into various markets like Brazil, China, India, and various
other nations of European, and Asian market. This strategy is found to effective for the company
but the negative aspect is the late mover. Unilever is its competitors, which have entered into this
market before P & G, and the company was unable to gain first mover advantage. However, this
could be beneficial for the company as the company can identify the key opportunity and
challenges that Unilever faced as the first mover and avoid those mistake and could be one-step
ahead (Ghaderi, 2016).
2. New product strategy – The company implement product innovation and enter into the new
product line to gain competitive advantage. This would include new product development for the
company. This has been an effective strategy for the company but has also lead to the failure of
some products due to this strategy. For example, Vibrant that was a safe color leach and has been
the failed product (Fazlıoğlu, 2019).
3. Go to market strategy – This can be said to be the most effective strategy as this is responsible
to reach maximum customers through a large number of retailers making the availability of
goods to a greater extent. However, this has led to a higher cost to the company (Petersen &
Kumar, Marketing communication strategies and consumer financial decision making: The role
of national culture, 2015).
Recommendations for organizational structure and decision-making
process
Research and development flexibility increment; It is recommended to P & G to increase the
investment in research and development so as to enhance the product innovation and new

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product development to improve the product strategy of the company. Moreover, this would also
lead to enhanced product based divided organizational structure. Regarding the decision making
process, it is recommended for the company to consider decentralized decision-making and
democratic leadership to enhance innovation in the organization and make the work more
effective (Petersen, Marketing communication strategies and consumer financial decision
making: The role of national culture, 2015).

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Conclusion
The key highlighting aspects that discussed in the report were P & G is a multinational consumer
goods company based in America founded in 1837. One of the key factors includes the culture of
the nation that affects an organization’s aspect to work in that nation, for instance, organization
culture, structure and key functions. Procter and gamble key organizational culture has been
transformed to be an innovative organizational culture. The company decided to go for an
innovative organizational culture that will include innovative technology, product and process to
offer to customers from a different nation.
The key factors of the globalization that would affect the structure of Procter and gamble include
Cross cultural differences, workforce diversity, and the emergence of global managers. For P&G
to go international lead to a change in organizational structure and the key reason is a cultural
difference in two nations. Therefore, due to globalization implication, P&G has company
structure based on geographical divisions, product type divisions, and functional divisions.
Procter and Gamble have entered into various nations for which the key mode of entering into
international markets is a strategic alliance or joint venture. For example P & G has entered into
China market through a strategic alliance with one of a local Chinese company that is Hutchison
Whampoa.

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Petersen, J., & Kumar, V. (2015). Marketing communication strategies and consumer financial
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Shek, D. (2016). Resilience as a focus of a subject on leadership and intrapersonal development.
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