The Procter & Gamble Company’s organizational culture supports leadership in the consumer goods industry and facilitates employee accountability. A firm’s organizational culture or corporate culture refers to the customs, values and principles that affect the behavior of individual employees, groups, and the organization as a whole unit. At Procter & Gamble, the corporate culture reflects business goals in achieving leadership in the global market. For example, the company aims to increase its portfolio of globally popular consumer goods brands. Also, its large organizational size is a contributor to the strength of economies of scale (Read: SWOT Analysis of the Procter & Gamble Company), but the company needs to employ its organizational culture to address tough competition from other consumer goods firms, such as Unilever. Procter & Gamble’s organizational culture has a direct effect on employees’ performance. Thus, this culture also helps determine P&G’s business performance. For long-term competitive advantage and success, Procter & Gamble’s leaders must effectively use the organizational culture for the workforce to achieve higher levels of performance and output.
As one of the biggest firms in the consumer goods market, Procter & Gamble must ensure that its organizational culture reflects the strategic objectives of the business. It is also essential that this corporate culture remains relevant to the external business environment. Over time, Procter & Gamble must adjust its cultural characteristics. Such adjustment should aim to match P&G’s business needs and empower its workers in fulfilling their roles in the business. An appropriate organizational culture supports Procter & Gamble’s human resource development programs necessary to maintain high productivity and competitive advantage.
Procter & Gamble’s Organizational Culture Type & Features
The Procter & Gamble Company has a purpose-driven organizational culture. Purpose is viewed as a factor that guides individual and group activity toward the success of the consumer goods business. Specifically, the corporate mission determines much of the characteristics of the corporate culture (Read: Procter & Gamble’s Vision Statement & Mission Statement). For example, the company integrates quality and value as factors that influence employee behavior, necessary for business competitiveness. The following characteristics define Procter & Gamble’s organizational culture:
- Passion for Winning
Integrity. This characteristic of Procter & Gamble’s organizational culture points out the significance of laws and rules of ethics. This corporate cultural characteristic covers the various principles that apply to P&G’s human resources and HR management. For example, integrity involves the principles of mutual respect, personal mastery, and innovativeness among Procter & Gamble employees. Also, this feature of the organizational culture encourages workers to ensure beneficial impact of the consumer goods business on its external environment. Such environment includes consumers, communities and Procter & Gamble’s suppliers. As a result, this cultural characteristic involves the purpose of corporate citizenship. It is worth noting that the fulfillment of corporate citizenship is emphasized in Procter & Gamble’s corporate social responsibility strategy.
Leadership. The Procter & Gamble Company instills leadership in various aspects of business performance in the consumer goods industry. For example, leadership in fulfilling job responsibilities is covered in this characteristic of P&G’s organizational culture. In addition, this cultural trait pushes Procter & Gamble employees to achieve leadership in business direction and in individual and organizational output. The company benefits from this aspect of the corporate culture in terms of the purpose of optimized strategy implementation and fulfillment. Procter & Gamble’s individual and group decision-making processes are also supported through this cultural trait.
Ownership. This characteristic of Procter & Gamble’s organizational culture focuses on the purpose of accountability. Ownership is applied at the individual, group and organizational levels. For example, P&G inculcates personal accountability throughout its workforce. Individual employees and their groups behave like owners of the business, thereby ensuring strategic success in the process. Also, Procter & Gamble takes ownership and accountability of all its activities, especially in terms of impact on external stakeholders of the consumer goods business. The company has programs and institutional procedures that support employees in applying this trait of the corporate culture.
Passion for Winning. Procter & Gamble’s corporate mission and vision require the company to keep improving in the consumer goods market. Passion for winning is an organizational culture characteristic that compels P&G employees, especially leaders to win for the purpose of excellence. For example, the corporate culture drives managers to develop strategies for Procter & Gamble’s product excellence. Moreover, this cultural feature motivates employees to keep improving to better support business goals. Thus, this organizational culture trait supports Procter & Gamble’s generic strategy and intensive growth strategies in terms of product innovation and development.
Trust. This characteristic of the organizational culture establishes a foundation of trust in Procter & Gamble. The purpose and objective is to develop employees’ confidence in each other’s work. This condition helps Procter & Gamble in minimizing conflict and promoting beneficial positivity in workers’ behaviors. For example, this feature of the corporate culture facilitates high quality relations among employees, between employees and customers, and between P&G and consumers. This effect contributes to Procter & Gamble’s high performance in the consumer goods market.
The Procter & Gamble Company’s Organizational Culture: Advantages & Disadvantages, Recommendations
One of the advantages of Procter & Gamble’s organizational culture is that it motivates employees to aim for excellence. For example, leadership and passion for winning are cultural characteristics that prompt employees to focus on achieving beyond-satisfactory output. Going beyond typical standards and expectations helps Procter & Gamble achieve industry leadership. Another advantage of P&G’s corporate culture is the spirit of accountability maintained through the ownership cultural trait. Such accountability facilitates problem-solving and suitable strategic responses to challenges Procter & Gamble experiences in the consumer goods industry.
However, the disadvantage of having moderate but limited emphasis on technical enhancement is notable in Procter & Gamble’s organizational culture. For example, passion for winning is a cultural characteristic that encourages employees to seek excellence in their work, but such passion does not necessarily equate to technical improvement. Also, the corporate culture encourages employees to have integrity, which includes technical mastery, but does not necessarily drive Procter & Gamble’s employees to achieve beyond the technical requirements of their jobs. Considering this disadvantage, a recommendation is to improve the organizational culture by adding a trait that highlights P&G’s continuous technical development, inclusive of skills necessary to support Procter & Gamble’s product development strategy. This additional trait can be integrated because the organizational culture already encourages the related traits of leadership and passion for winning.
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- The Consumer Goods Industry in the United States – U.S. International Trade Administration.
- The Procter & Gamble Company – Who We Are.
- The Procter & Gamble Company, Form 10-K.