Analysis of Procter & Gamble's Organizational Structure and KPIs

This report provides an in-depth analysis of the organizational structure of Procter & Gamble (P&G). It begins with an overview of P&G, detailing its history, products, and current leadership. The core of the report focuses on comparing and contrasting mechanistic and organic organizational structures, explaining their characteristics and suitability for different business environments. The report then applies these concepts to P&G, examining its structure and the implications of its choices. Furthermore, the report explores the application of Key Performance Indicators (KPIs) to evaluate P&G's success, suggesting specific metrics like cash flow forecast, gross profit margin, revenue growth rate, inventory turnover, accounts payable turnover, and relative market share. The report concludes with references to support the analysis.

Running head: ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
Organisational structure of Procter & Gamble
Name of the student:
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1ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
Chosen organisation: Procter & Gamble (P&G)
About P&G
The Procter & Gamble Company (P&G) is associate American multi-national trade
Goods Corporation that is headquartered in downtown Cincinnati, Ohio, based within
the year of 1837 by English yank William Procter and Irish American James Gamble. David
Taylor is that the current president and chief executive officer of Procter & Gamble. It makes
a speciality of a large vary of private health or client health, and private care and
hygiene product. These product area unit organized into many segments as well as Beauty,
grooming, health care, cloth and residential care, and baby, female and family care. Before
the sale of pringles to the food manufacturer company, its product portfolio conjointly
enclosed foods, snacks, and beverages("Procter & Gamble Company", 2019).
Mechanistic approach versus Organic approach
The structure of the organisation indicate the framework an organisation uses to
identify differences in power and authority, roles and responsibilities, as well as the manner
during which info gets transferred from one place to another. It is necessary for a company to
opt for a structure that is acceptable due to the demands and permit of the individual from the
corporate so that reaction and adaptation of uncertainties along with changes can take place in
the internal and external environments. Having an appropriate structure can permit an
organization to implement correct in operation procedures and decision-making processes
which will aid the organization in accomplishing its goals. Tom Burns and G.M. Stalker
known two basic varieties of structures: mechanistic and organic structures (Coghlan, 2003).
Mechanistic approach:
The mechanistic structure is that the most typical rigidbusiness structure and is
usually utilized in a producing setting. It describes associate structure that is supported a

2ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
proper, centralized network. This type of mechanistic structure is suitable to organisations,
which operate in an exceedingly stable and sure setting. It is an open environment. In
general, a mechanistic structure can be considered as straightforward to keep up and
barely has to be modified once a company operates in an exceedingly stable setting. This
sort of structureis official, which implies it employs
an extremely centralized authority. Principally the communication is vertical. A
collection of formal procedures, processes and functions are executed throughout the
organization below a mechanistic structure (Burns & Stalker, 2005).
Organic approach:
An organic structure may be a flat flexibleorganization that permits for horizontal
communications and interactions and is a lot of suited to inventive businesses. This
kind of structure is decentralized, giving workers in any respect levels an opportunity to
participate in business-related higher cognitive process. It is employed in companies that are
faced with instability and dynamic environments and wish to quickly adapt to
vary. Once associate degree setting changes, a company should be able to gather, process,
and air data terribly quickly. Failure to do such will directly have an effect on an
organisation’s ability to keep up its competitive advantage. It is a closed environment.
Communication is multidirectionalin these complicated environments. To attain this,
organisations that use associate degree natural object can integrate useful areas and
departments along so data will flow seamlessly between them. This quick distribution of
data leads to associate degree multiplied ability to responds to changes within the external
and internal environments.
Mechanistic Organic
Individual specialization: Joint specialization:

3ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
Separate work and specialisation in a task Coordinated and united effort.
Simple integrating mechanisms:
Broadly defined hierarchy of authority.
Complex integrating mechanisms:
Task forces and teams are primary integrating
mechanisms.
Centralization:
High decision making. Most communication is
vertical.
Decentralization:
Delegated authority to control tasks. Lateral
communication
Standardization:
Extensive rules and standard operating
procedures.
Mutual adjustment:
Direct contact related to coordination. Work
process tends to be unpredictable.
Written communication Verbal communication
The organisation corresponds to tasks in a
network positioning. Every person is provided
with a single task
It involves a network of people and teams.
People indulge in working in diverse capacities
at similar time intervals.
Summary
The application of mechanic organisation business structure is done for gaining
predominance in terms of production. On the other hand, the application of the organic
organization is done to the businesses that provide an addition to the open business
structure such as online business platforms.
In general, companies operating in an exceedingly mechanistic organization undertake
hold management, rather than the processes and employees with a control thus to talk.
Rules are enforced and there is no clear deviation in addition to the clear chain of command
that is followed for the delegation of responsibilities and power within the organization.
Again, it is the manufacturing corporations that are accepted for this kind of

4ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
structure however there are alternative teams that like mechanistic organization, for
example universities.
Companies in associate organic organization structure generally posses a lot of open
communication and contributes to the tasks that exists. The business structure is a lot
of pliable and versatile related to changes. The surroundings can be unpredictable mainly due
to the freedom that is afforded by the employees and management it is highly maintained.
Google can be considered as an example for this type of structure and so the sought
after positions that lie inside the Facebook Corporation. Organic organizations
have accomplished that a contented geographic point makes for a contented worker.
The aspects of P&G which I would like to change is: -
 With the time spent online by customers, updating of the traditional ways of reaching
them was taken into account. Hence, new methods were learned to help in marketing
customers and to change the marketing mix at a digital level.
 The massive change towards premium product was that of China as it moved to
premium products. This proved to be a threat the mid-tier product strategy that had
been effective over the years.

5ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
The above diagram is the organisational diagram of P&G. This new design is showing
that there is a stop in selling of any food items. Our organisation might focus on few specific
categories and by make a stop in selling of food, it might can improve the ability of the
organisation in order to meet their goals.
The proposed new structure of the organisation is working well as planned after the time
period of 6-12 months. After a period of struggle, individuals and organizations usually
emerge from their negativity, breathe a sigh of relief, and shift into a more positive, hopeful,
future-focused phase. The management might have access to the dramatic changes that they
made to transform P&G. The management team were taking up the disruption of the current
world as well as using it restructure our organisation to win in the marketplaces and the win
over the consumers.
A Key Performance Indicator (KPI) may be a measurable worth that
demonstrates however the effectiveness of an organization to achieve the key business
objectives. The application of KPIs helps organizations to understand success-reaching
targets (Zhang et al, 2015).
The key performance indicator that I would like to measure is cash flow forecast, Gross
profit margin as a percentage of sales, revenue growth rate, inventory turnover, accounts
payable turnover and relative market share. I would like to measure these KPIs because it will
help me out in evaluating our organisation’s success at reaching targets.

6ORGANISATIONAL STRUCTURE OF PROCTER & GAMBLE
References
Burns, T., & Stalker, G. M. (2005). Mechanistic and organic systems. Organ Behav, 2, 214-
25.
Coghlan, D. (2003). Practitioner research for organizational knowledge: Mechanistic-and
organistic-oriented approaches to insider action research. Management
Learning, 34(4), 451-463.
Procter & Gamble Company. (2019). Retrieved from https://us.pg.com/
Zhang, K., Hao, H., Chen, Z., Ding, S. X., &Peng, K. (2015). A comparison and evaluation
of key performance indicator-based multivariate statistics process monitoring
approaches. Journal of Process Control, 33, 112-126.