Procter & Gamble Co.

Also known as P&G, is an American multinational consumer goods company headquartered in

downtown Cincinnati, Ohio, United States, founded by William Procter and James Gamble, both
from the United Kingdom. Its products include cleaning agents, and personal care products.
Prior to the sale of Pringles to the Kellogg Company, its product line also included foods and
beverages.
In 2014, P&G recorded $83.1 billion in sales. On August 1, 2014, P&G announced it was
streamlining the company, dropping around 100 brands and concentrating on the remaining 65
brands, which produced 95 percent of the company's profits. A.G. Lafley, the company's
chairman, president and CEO until October 31, 2015, said the future P&G would be "a much
simpler, much less complex company of leading brands that's easier to manage and operate".
David Taylor became P&G CEO and President effective November 1, 2015. P&G remains a
highly selective employer as less than 1% of all applicants are hired annually.

Operations
As of July 1, 2014, the company structure has been categorized into four sectors and five Selling
& Market Organizations (SMOs).

Sectors
o Beauty Care
o Baby, Feminine, and Family Care
o Fabric and Home Care
o Health and Grooming

SMOs
o Asia
o Europe
o India, the Middle East, and Africa (IMEA)
o South America
o North America

Brands
Main article: List of Procter & Gamble brands

As of 2015, twenty one of P&G's brands have more than a billion dollars in net annual sales.
Most of these brandsincluding Bounty, Crest and Tideare global products available on
several continents. P&G's products are available in North America, Latin America, Europe, the
Middle East, Africa, Asia, Australia and New Zealand.

P&G's HR Practices and Culture

From the very beginning, P&G's

management treated its employees like
family members.
The company's core values, purpose, principles and vision focused on the development of its
people (Refer Exhibit IV, V and VI). In 1885, P&G decided to give its employees Saturday
afternoons off with pay. By 1887, P&G had started a profit-sharing plan.
In 1915, the company began to offer a sickness, disability and life insurance plan. Eight years
later, P&G guaranteed employees forty-eight weeks of employment in a year.
While the Great Depression of the 1930s forced other manufacturers to shut down, P&G's soap
plants continued to function. P&G has traditionally encouraged lifetime employment by offering
stock options and other benefits to those who stayed with the company.
P&G followed a comprehensive recruitment process. The company's cultural legacy was the rule
to conduct almost all its recruitments on campuses. Resumes were scanned for promising
candidates, including those students who had not signed up for interviews. Top officials of the
company went for pre-placement talks at colleges. Strong relationships were developed with
college placement offices and faculty. The company hired students for various functions such as
finance, manufacturing, marketing, research and sales. It hired from all the major universities in
general, and from the big business schools such as Harvard, Wharton, Stanford and
Northwestern in particular.
P&G conducted written tests to evaluate the applicants' aptitude for leadership and problem
solving. The company conducted an in-house test (known as the M Test) that measured the
candidate's interpretative and reasoning skills. Studies made by P&G showed a strong positive
correlation between high scores on the M Test and success on the job.

P&G's interviewing process was purposeful and behavior-based. The candidate's past experience
and accomplishments were examined for leadership, problem solving capabilities, initiative and
ability to work with others.
P&G's manpower policies emphasized giving new recruits early responsibility and charted out a
rapid career path. New recruits were encouraged to build long-term careers with the company.
The company took several measures to develop its employees. Superiors were encouraged to
train and help in the development of their subordinates. The vehicle for this process, used around
the world, was the Work and Development Planning System (W&DP).

P&G unethical scandal

Abstract
Procter & Gamble Co., otherwise referred to as P&G, is an American multinational
consumer goods company founded by William Procter and James Gamble in the year
1837.
Palm oil is a common substance found in P&Gs line of beauty and
household care products. In being one of P&Gs major suppliers of palm oil, BW
Plantations is said to operate in the region of Kalimatan, located in Indonesia
(GeenPeace pdf). However, BW Plantation and its subsidiaries are among the top
companies known for their unethical practices of deforestation in the global
business world. More precisely, their unethical practices of rapid deforestation of the
Sumatra Jungle have caused endangered species such as the Sumatran Orangutan
and Tiger to unjustly face the brink of extinction. Environmental friendly
organization, GreenPeace, have reported that, The palm oil sector is currently the
greatest single driver of deforestation in Indonesia, accounting for about a quarter
of all forest loss. The organization also reported the number of these endangered
species thought to remain living in the Sumatra Jungle. The report stated that as
few as 400 Sumatran Tigers are thought to remain in the jungle and a postdated
report of five years ago stated that the Sumatran Orangutan population was
thought to be around 6500 (GreenPeace pdf). As a mass producer of common
household products, P&G deceptively included their consumers to contribute to the
unethical practices of deforestation by allocating consumer profits to fund BW
Plantation and their subsidiaries.

Stakeholders

In supporting the unethical practices of its major palm oil supplier, BW Plantations,
Procter and Gamble have extended those affected by the unethical situation. There
are various stakeholders to be considered when analyzing this case. Internally,
P&Gs A.G. Lafley who serves as Chairman of the Board, President and Chief
Executive Officer and Werner Geissler who serves as vice chairman and advisor to
the CEO are stakeholders within the upper level management of the company (P&G
executive team). They are among the few people that have knowledge of such
wrongdoings and by running the company in such an unethical manner, their
reputation and credibility can be ruined along with the company name. The
companys functioning employees that produce the products are also stakeholders
who serve to have an interest in the companys practices. Although they may be
unaware of the unethical practices that occur to source the palm oil they use to
produce P&G products, they still contain an interest in the company and are
affected in some way when such ethical wrongdoings are revealed. They may feel
deceived and uneasy about the practices of the companys supply chain which can
hinder their decision as to sustaining employment at P&G. Furthermore, those who
invest in P&G and own stock in the company are among another group within the
internal boundaries of the company that are affected by such unethical
wrongdoings. The value of the companys stock may decline due to the deficient
reputation of the companys supply chain which directly affects those stockholders
who hold stock in the company. BW plantation, the peer company of P&G is another
member affected by this case. Since their unethical wrongdoings are now exposed,
their reputation and credibility will worsen as well and they may find themselves to
be undesirable by other companies who are in search for suppliers of raw materials.
Therefore, their interests and the way in which they conduct their practices will be
affected by this case. Externally, there are various groups affected by the case,
some of which include: customers, the community, the environment, and those
species in endangerment due to these practices. Customers have interests in the
companys in which they purchase from; therefore, being exposed to the
wrongdoings of P&G and its suppliers may hinder their decision when purchasing
products. The community is directly affected as well because the community is
made up of those customers who purchase P&G products, therefore, if customers
choose not to purchase P&G due to the awareness of their wrongdoings, the
structure and concerns of the community will change due to the change in the
companys reputation. Lastly, the environment and the Sumatran Orangutan and
Tiger species are those who are affected most by the unethical practices of P&G and
their peer supply company, BW Plantation. The environment within Indonesia is
being decimated each day. What once was a land full of rain forests and natural
beauties is now a battered wasteland that serves as a goldmine for sourcing raw
materials. The beautiful species of the Sumatran Tiger and Orangutan that once
flourished in this region are at the brinks of extinction due to the destruction of their
homelands. Each day, another tiger or orangutan is lost and the road to extinction is
a short ways away for these poor and helpless species.

Individualism
Individualism is the ethical theory that values the business, the owners choices,
and business profits. The ethical rule within individualism is that business actions
should aim to maximize profits for the owners of a business, but do so within the
constraints of the law (Case Manual). As the original inventor of the theory, Milton
Friedman forcefully argued that businesses should not attempt to be socially
responsible and that spending money on resources, employees, and donations to
causes is wrong because it is essentially stealing from the owner or owners of the
company (Case Manual). Friedman contained a sole focus on the profitability of the
business. Therefore, in the Individualistic eyes of Friedman, P&G is not in the wrong

for the unethical practices of its suppliers. This can be argued because by
outsourcing its palm oil from suppliers of foreign nations, P&G is able to acquire
massive amounts of palm oil at moderate to low prices. Therefore, by reducing the
costs of producing their products while obtaining a steady inflow of raw materials
required to produce the products, P&G can efficiently sell their products in mass
quantities throughout various specters of the world. In turn, the sales and
profitability of the company will increase which will intuitively increase and or
maximize the wealth of the owners of the company. Furthermore, Procter and
Gamble is not violating any laws by obtaining their Palm oil in the foreign nation of
Indonesia. There are little to no regulation of deforestation in Indonesia, therefore,
P&G is operating to maximize its owners wealth without violating any major laws,
so they are exercising effective business strategy to maximize their profits and are
not unethical in doing so in the eyes of the Individualist, Milton Friedman.

Utilitarianism
Utilitarianism is the ethical theory that values the happiness of all conscious
beings, often interpreted hedonistically as pleasure and the absence of pain, but
also sometimes interpreted as the satisfaction of desires. The ethical rule within
the Utilitarian framework is that Business actions should aim to maximize the
happiness in the long run for all conscious beings that are affected by the business
action (Case Manual). The stress of concern is on the long term costs and benefits
of actions. From a Utilitarian standpoint, P&G is behaving unethically by supporting
and conducting business with BW Plantation. P&G is failing to realize that the
Sumatran Tiger and Orangutan species are in fact conscious beings capable of
experiencing happiness. Furthermore, it can be argued that the destruction of their
native homeland as a means of obtaining raw materials does not promote
happiness in any degree; rather it is causing pain and fear to two species that now
face the danger of becoming extinct. It was reported that as few as 400 tigers are
thought to remain in the rainforests of Sumatra and the endangered Orangutan
species were estimated to contain 6500 Orangutans five years ago (GreenPeace).
Therefore, by failing to value the happiness of these species in their procedure of
obtaining palm oil used to produce their products, P&G is performing in an unethical
manner.

Kantianism
Originating with Philosopher, Immanuel Kant, Kantianism is the ethical theory that
values rational decision-making, autonomy of individuals, honesty and freedom. The
ethical rule within this framework states to Always act in ways that respect and
honor individuals and their choices. Dont lie, cheat, manipulate or harm others to
get your way. Rather, use informed and rational consent from all parties (Case
Manual). This theory also shows a strong concern with the moral permissibility of an
action and the moral worth in the motivation of the action. An action is morally
permissible if it is said to be rational. A rational action with the right motivation
driving such action is the key evaluating factors when analyzing whether an action
is morally permissible in the eyes of Kant. When producing and marketing their
products, P&G fails to provide information as to where they obtain their raw
materials and from whom. Failing to provide substantial information in relation to
their production can be seen as a manipulative tactic towards consumers who

purchase the products and to the employees who produce the products that do not
contain the information as to how the Palm oil is obtained. Essentially, P&G is
wrongfully using these groups of people in a manipulative way to get what they
want; a mass produced product that does not render high production costs and
could be sold at moderate prices to sustain a substantial level of sales volume.
Therefore, from a Kantian standpoint, the actions of P&G cannot be seen as rational
and do not contain the right motivation behind them.

Virtue Theory
Originated by the Greek philosopher, Aristotle, Virtue Theory is the ethical theory
that values character traits that promote wellness or flourishing of individuals within
a society. The ethical rule within the framework states act so as to embody a
variety of virtuous or good character traits and so as to avoid vicious or bad
character traits (Case Manual). Aristotle states that we all need to exercise our
rationality in whatever talents we have and to relate to others in the world in a way
that brings balance into our relationships (Case Manual). Furthermore, when
analyzing an individuals character, the character traits of the individual must be
evaluated and classified individually. Virtues are those character traits that aid to
the flourishing of the individual whereas vices are those traits that inhibit flourishing
(Case Manual). Through the usage of their deceptive tactics, P&G included its
consumers and its own employees to become a part of such a devastating
environmental scandal. Therefore, it could be said that P&G and its representatives
have been dishonest, selfish, and greedy in regards to their consumers and
employees. These vices are inhibiting the flourishing of the company and have
created a negative relationship between the company and its consumers. It can be
argued that P&G has not been taking any measures in balancing their relationships
between themselves and consumers. As stated in the GreenPeace article titled,
Pulling back the shower curtain: Find out about P&G's dirty secret! , researchers of
the organization have stated We've confronted P&G for the last eight months with
how it is exposing consumers to forest destruction. Instead of taking urgent action it
is trying to greenwash its actions. Therefore, P&G is not acting virtuous or rationale
in regards to their relationship with their consumers and due to their lack of virtue
in their actions, it can be concluded that P&G is behaving unethically based on the
framework of Virtue Theory.

P&G Does The Right Thing?

Procter and Gamble portrays itself as a good guy and claims to "do the right thing". They also
claim that they "will not drive results through illegal or unethical dealings". Unfortunately their
actions don't match their widely publicized "Purpose, Values and Principles" (PVPs).
Time and time again P&G has violated its own PVPs; in most cases these violations get little or
no media coverage. P&G then utilizes its massive advertising budget and marketing know-how
to sell you on the superiority of their products while at the same time counteracting any negative
responses incurred by their ethical violations. Case in point is their recent Thank You Mom
promotion - a real tear jerker. Meanwhile, behind the scenes P&G continued to support the ultra
right wing ALEC organization. They finally withdrew support from ALEC after being threatened
with a boycott led by ColorofChange.org.
Based on prior behavior, we believe P&G will only do the right thing when forced to do so!
Do you believe P&G Does The Right Thing?
For many years P&G has lived in our communities and in our homes under the guise of being a
model corporate citizen. Unfortunately, the model corporate citizen guise is just that, a guise.
Over the years P&G has engaged in a significant number of unethical activities:
* publicly professing commitment to supplier diversity while privately doing the opposite
* pricing their products higher than comparable competitive products based on
unsubstantiated claims of premium quality
* anti-union lobbying
* tax avoidance schemes
* trademark bullying
* fictitious celebrity interviews
* price fixing in the EU
* faked advertising photos
* chemical testing on small animals
* charges of insider trading by a company director
* arrogantly refusing to end its support of ALEC until threatened with a boycott
Tellingly, P&G has never appeared on the list of The World's Most Ethical Companies as
selected annually by the highly regarded Ethisphere Institute (http://www.ethisphere.com/). All
of P&Gs major competitors (Colgate, Kimberly Clark, and Kao) have been on the list at least
once since its inception in 2007. Importantly, formerly bad acting Microsoft has recognized the
value of ethical business conduct and is now on the most recent list of the Worlds Most Ethical
Companies.
Ethisphere believes that, The Worlds Most Ethical Companies are the ones that go above and
beyond legal minimums, bring about innovative new ideas to expand the public well being, work

on reducing their carbon footprint rather than contributing to green washing and wont be found
next to the words Billion Dollar Fine in newspaper headlines any time in the near future. These
are the companies that stand out among the competition in their industry.
P&G believes being loud equates with being ethical. By simply dropping $100 million into
clever marketing and public relation schemes they give the impression that they have fulfilled
their ethical commitments.
This is not the kind of company deserving of public trust. Tell Procter & Gamble to adhere to
their public statement, We do the Right Thing. Tell P&G you are not satisfied with their
ethical practices.