Procter & Gamble in China: Global Business Environment Report

This report examines the global business environment of Procter & Gamble (P&G) in China, focusing on the influence of globalization on the company's structure, culture, and functions. It analyzes the optimal leadership structure, recommending a hierarchical approach, and explores the impact of globalization on P&G's operations. The report discusses the importance of ethical considerations, labor practices, and decision-making processes within the Chinese market. It highlights the benefits of consultative decision-making and suggests franchising as a strategic approach for international business expansion. The analysis covers various aspects, including organizational governance, ethical considerations, and strategic challenges, providing insights into P&G's approach to the Chinese market. The report concludes by emphasizing the importance of maintaining ethics and culture in the face of globalization and highlights the importance of franchising. The report references several academic sources to support its findings.

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Executive Summary
This report aims to develop the structure of the organization with that of the culture and the
functions that need to be followed by P&G in China. Hierarchical leadership is found to be
the best for P&G while developing the business as there will not be any impact of
Globalization. P&G will hire most of the employees from other countries so that they can
reduce the cost and develop the operation that has been of need. This report also finds that
labor although a problem to be faced by P&G in China there will not be any kind of question
regarding moral of the labors. Consultative way of making decision will be followed by the
company and that the company makes sure that that all the employees take part in giving their
opinions. The company will develop its international business through the means of
franchising and that it helps in making most of the profits.

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Table of Contents
LO3: Influence of global market operations on the structure, function, and culture of an
organization.....................................................................................................................................
Introduction......................................................................................................................................
Discussion........................................................................................................................................
Structure of the organization, function, and culture of P&G in China.......................................
Structure of leadership and Governance of the organization................................................
The Culture...........................................................................................................................
Functions...............................................................................................................................
Functions of P&G China ethically and sustainability................................................................
Labors....................................................................................................................................
Moral.....................................................................................................................................
Preventing Abuses.................................................................................................................
Conclusion.......................................................................................................................................
LO4: Globalization influencing decision making of organization and strategy..............................
Introduction......................................................................................................................................
Discussion........................................................................................................................................
Decision making working ways.................................................................................................
International Business Rotes......................................................................................................
Conclusion.......................................................................................................................................
References........................................................................................................................................

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LO3: Influence of global market operations on the structure, function, and
culture of an organization
Introduction
Proctor and Gamble is an American multinational company that had its branches all
over the world. The company mainly deals with FMCG products and that has a good market
value. This report is going to look into the ways through which Organizational Governance
and the structure of leadership needs to be followed by the Company while developing
business in China. This report will also be going to look at the culture of the organization that
needs to be followed along with the functions that need to perform. Ethical issues will also be
given stress.
Discussion
Structure of the organization, function, and culture of P&G in China
Structure of leadership and Governance of the organization
Shareholder Model of Corporate Governance is found to be best for P&G to develop
business. This model is important for P&G as it helps in maximizing the returns to the
shareholders by serving more to the customer. Globalization has been helping P&g to
develop business there is an influence in the leadership. The company has been found to
follow Hierarchical Leadership where most of the power belongs to the top most position
rather than of the lower levels. (Autor, Dorn and Hanson, 2016).
The Culture
Globalization has helped companies to develop business and minimizing the barriers
that come while developing trading operations. P&G which has been a developed company in
the FMCG industry will employ people from the country and makes sure that that they will

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solve most of the problems in the operations by their own style. As opined by Cao, and
Pederzoli (2013), most of the companies take advice from the workers of other countries
where they have their branches so that operation related problems can be solved at ease.
Functions
Globalization although develops most of the competition in the market it helps P&G
to function in an effective way. Most of the people for functioning in other countries will be
hired from that country and that a management structure will also be developed. That
management will only follow up with the company’s own management every single day
regarding the function (Corsi, Minin and Piccaluga, 2014).
Functions of P&G China ethically and sustainability
Labors
Labor is not suitable in Chinese market. Although most of the labor in the country are
well skilled and have the tenure to work for a company there is an early rise in the wages of
labor.
Moral
P&G rightly follows that there is integrity within the employees and that they are
straightforward when developing business. There is always a passion from the employees
with that of the management to take a win over the market and that in an ethical way. The
biggest thing that all customers have faith and trust with the products that are developed by
P&G (Khairullah and Khairullah, 2013)
Preventing Abuses
P&G believes that doing things in a right way will prevent abuses from the company.
The company believes that there is a healthy environment in the workplace and that violence

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from any of the people either in the management or at the worker level will not be considered
for any reason (Zheng, 2014).
Conclusion
In conclusion it can be said that although globalization opens up a new market for
P&G ethics and culture need to be maintained for the development of employees and the
company in the future.
LO4: Globalization influencing decision making of organization and
strategy
Introduction
Decision making is an integral part of business and that many times it is found that
based on making a decision the development of a company depends without being impacted
by the influences of globalization (Robins, 2013)
Discussion
Decision making working ways
Consult decision making is the best way for P&G to carry on as it helps the company
to gather the inputs from the employees which are really of need. According to Li (2014),
getting the inputs from the other employees it is better to make or take any kind of decision
that really works best for the company than taking decision by the management of their own.
International Business Rotes
In developing international business P&G will follow Franchising as it helps in
increasing the profits of the company. Globalization has led to competition in the market and
for that most of the companies look for developing profits. As opined by Li, Kang and Haney

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(2017), in franchising the quality is managed in a better way. Supervision also gets ease for
the company as the franchiser has the responsibility to supervise the stocks and the products.
Conclusion
In conclusion it can be said that P&G ensures that franchising will be the best option
for the company to operate in a globalized manner and that consulting decision works the
best.

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References
Autor, D.H., Dorn, D. and Hanson, G.H., 2016. The china shock: Learning from labor-market
adjustment to large changes in trade. Annual Review of Economics, 8, pp.205-240.
Cao, L. and Pederzoli, D., 2013. International retailers' strategic responses to institutional
environment of emerging market: Multiple case studies in China. International Journal of
Retail & Distribution Management, 41(4), pp.289-310.
Corsi, S., Di Minin, A. and Piccaluga, A., 2014. Reverse innovation at Speres: A case study
in China. Research-Technology Management, 57(4), pp.28-34.
Khairullah, D.H. and Khairullah, Z.Y., 2013. Cultural values and decision-making in
China. International Journal of Business, Humanities and Technology, 3(2), pp.1-12.
Li, P.F., 2014. Horizontal versus vertical learning: Divergence and diversification of lead
firms in the Hangji toothbrush cluster, China. Regional studies, 48(7), pp.1227-1241.
Li, S., Kang, M. and Haney, M.H., 2017. The effect of supplier development on outsourcing
performance: the mediating roles of opportunism and flexibility. Production Planning &
Control, 28(6-8), pp.599-609.
Robins, F., 2013. The uniqueness of Chinese outward foreign direct investment. Asian
Business & Management, 12(5), pp.525-537.
Zheng, P., 2014. The contrasting strategies of owner-managed and foreign-engaged joint
ventures under market socialism in China. International Entrepreneurship and Management
Journal, 10(3), pp.539-560.