A PROJECT STUDY ON ORGANIZATIONAL CULTURE AT

P&G CO.,LTD

JAYAKRISHNAN J NAIR

MZC19MBA15

Under the guidance of

Ms. JAINY RAJAN

ASSISTANT PROFESSOR, MBA DEPARTMENT

in partial fulfillment of the requirements

for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Of
A P J Abdul Kalam Technological University

SCHOOL OF BUSINESS MANAGEMENT

MOUNT ZION COLLEGE OF ENGINEERING,

KADAMMANITTA

JANUARY, 2020
 ABSTRACT

The culture play a vital role in an organization as these are usually

associated with the perceptions, ideas, values, beliefs and most importantly the
behavior of its employees. It is a manifestation of the attitudes of organizational
members towards the organization.

This project report focuses on the organizational cultures of P&G co.,

ltd.
CONTENTS

Sl.No Title Page No

1. Introduction 1
2. Company Profile 2-4
3. Organizational Culture of P&G 5
CO.,LTD
6-8
3.1  Procter & Gamble’s
Organizational Culture
Type & Features

3.2  The Procter & Gamble 9

Company’s Organizational
Culture: Advantages &
Disadvantages,
Recommendations

4. Conclusion 10
5. References 11
 1. INTRODUCTION

Culture of the organization is something that could principally

land a business true competitive advantage. Organizational culture is a complex phenomenon
and is formed in variety of ways, it may originate from the challenges and obstacles that
organization face, it could be a deliberate creation of the management, People working in the
organization have strong input in forming a culture.

Organizational Culture is a term that describes the shared values and

goals of an organization. When everyone in a corporation shares the same values and goals, it’s
possible to create a culture of mutual respect, collaboration, and support. Companies that have a
strong, supportive culture are more likely to attract highly qualified, loyal employees who
understand and work toward the company’s best interest.

Organizational culture encompasses values and behaviors that

contribute to the unique social and psychological environment of a business. The Organizational
culture influences the way persons interact, the context within which knowledge is created, the
resistance they will have towards certain changes, and ultimately the way they share knowledge.

Cultures include the organization’s vision, values, norms, systems,

symbols, language, assumptions, environment, location, beliefs and habits. It may also be
influenced by factors such as history, type of product, market, technology, strategy, type of
employees, management style, and national culture.

Organizational culture is a commonly held- in- the- mind framework of

organizational members. This framework contains basic assumptions and values. These basic
assumptions and values are taught to new members as the way to perceive, think, feel, behave,
and expect others to behave in the organization. Edgar Schein (1999) says that organizational
culture is developed over time as people in the organization learn to deal successfully with
problems of external adaptation and internal.

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 2. COMPANY PROFILE

Fig : Company Logo

Procter & Gamble Co. (P&G) is an American company based

in Cincinnati, Ohio that manufactures a wide range of consumer goods. In India Proctor &
Gamble has two subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd.
P&G Hygiene and Health Care Limited is one of India's fastest growing Fast Moving Consumer
Goods Companies with a turnover of more than Rs. 500 crores. It has in its portfolio famous
brands like Vicks & Whisper. P&G Home Products Limited deals in Fabric Care segment and
Hair Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric Care
segment, and Head & Shoulders, Pantene, and Rejoice in the Hair Care segment.

Fig : Head Quarters of P&G Co.Ltd

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 Procter & Gamble's relationship with India started in 1951 when Vicks Product
Inc. India, a branch of Vicks Product Inc. USA entered Indian market. In 1964, a public limited
company, Richardson Hindustan Limited (RHL) was formed which obtained an Industrial
License to undertake manufacture of Menthol and de mentholised peppermint oil and Vicks
range of products such as Vicks VapoRub, Vicks Cough Drops and Vicks Inhaler. In May 1967,
RHL introduced Clearsil, then America's number one pimple cream in Indian market. In 1979,
RHL launches Vicks Action 500 and in 1984 it set up an Ayurvedic Research Laboratory to
address the common ailments of the people such as cough and cold.

Fig : David .S. Taylor

(CEO of P&G Co. Ltd)

In October 1985, RHL became an affiliate of The Procter & Gamble

Company, USA and its name was changed to Procter & Gamble India. In 1989, Procter &
Gamble India launched Whisper - the breakthrough technology sanitary napkin. In 1991, P&G
India launched Ariel detergent. In 1992, The Procter & Gamble Company, US increased its stake

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 in Procter & Gamble India to 51% and then to 65%. In 1993, Procter & Gamble India divested
the Detergents business to Procter & Gamble Home Products and started marketing Old Spice
Brand of products. In 1999 Procter & Gamble India Limited changed the name of the Company
to Procter & Gamble Hygiene and Health Care Limited.

P&G Home Products Limited was incorporated as 100%

subsidiary of The Procter & Gamble Company, USA in 1993 and it launched launches Ariel
Super Soaker. In the same year Procter & Gamble India divested the Detergents business to
Procter & Gamble Home Products. In 1995, Procter & Gamble Home Products entered the Hair
care Category with the launch of Pantene Pro-V shampoo. In 1997 Procter & Gamble Home
Products launches Head & Shoulders shampoo. In 2000, Procter & Gamble Home Products
introduced Tide Detergent Powder - the largest selling detergent in the world. In 2003, Procter &
Gamble Home Products Limited launched Pampers - world's number one selling diaper brand.

Today, Proctor & Gamble is the second largest FMCG

Company in India after Hindustan Unilever Limited.

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 3. ORGANIZATIOL CULTURE OF P&G CO.,LTD

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 , 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.

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 3.1 Procter & Gamble’s Organizational Culture Type & Features

Fig: Procter & Gamble Values

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. 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:

1. Integrity
2. Leadership
3. Ownership
4. Passion for Winning
5. Trust

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 1. 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.

2. 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.

3. 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
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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.

4. 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.

5. 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.

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 3.2 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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 4. CONCLUSION

Procter and Gamble is one of the largest companies in the world

that manufactures personal care products. Many familiar brands are owned by P&G which makes
it a common household name. The values and standards that P&G uses to guide their decisions to
respond to customer needs, product issues, and community involvement are very important to
their market and non-market stakeholders.

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 5. References

 Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change
work in progress. Routledge.
 Guiso, L., Sapienza, P., & Zingales, L. (2015). The value of corporate culture. Journal of
Financial Economics, 117(1), 60-76.
 Koren, Y., Gu, X., & Freiheit, T. (2016). The impact of corporate culture on manufacturing
system design. CIRP Annals-Manufacturing Technology, 65(1), 413-416.
 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.

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