Colgate-Palmolive Company is a multinational company with its headquarters based in New York. Its products include healthcare, personal and household products such as oral hygiene products, soaps and other forms of detergents. The initiator, William Colgate, had experience in making soap and candle having worked at a factory in the country. The factory now provides employment to people across the globe. The company’s success can be attributed to the sound systematic management style at the executive wing of the company. The company’s style of management is that which allows for independent decision making at the top, making priorities for business and leadership development and the emphasis on continuous improvement of their products. Colgate Palmolive consists of directors who are independent from the company’s direct management but the company has integrated their views and expertise to achieve a harmonious relation with them (Colgate). This brings a lot of diversity in approach to management and independent judgment. Therefore it has enabled Colgate Palmolive Company to work as one system with its numerous subsidiaries. This is so far a manifestation of the customer value oriented type of management where a warm working relation is guaranteed and the customers and other business partners are contented. So far the systematic approach of management has aided the company in breaking down the complexities and has so far provided a framework for understanding the cause-effect relationships within the company.
Systems approach to managing Colgate Palmolive Company
This approach of management developed around 1950 and emphasizes the need for interdependence and interrelationship among various activities of an organization. This approach aims at identifying the nature of relationship among various components of the organization which is considered as a large system. Colgate Palmolive can be considered as a system since its subsidiary companies are interrelated and interacting and are assembled, though in different environmental settings, in a particular sequence to produce results. They may be viewed as sub system or as the larger system of Colgate Palmolive. It’s through these subsidiaries that the larger Colgate Palmolive operates, thus the whole company is viewed in totality/ or as an entity. The various subsidiaries are involved in the overall functioning of the whole company since they are closely related in the management systems. Similarly these subsidiaries interact with each other by getting influenced and influencing others.
Thus in the system there is a wheel within the wheel making and these contribute to the larger system, the Colgate Palmolive International. These subsidiaries have boundaries and internal environment which mainly consists of internal and controllable variables; and external environment which is generally outside the control of the larger system. Management is more concerned with the availability of a good working condition for all within the system so that the values and objectives of the company may be achieved and that everybody to get satisfaction from the kind of work that they do. It involves forecast and planning, organizing and staffing and the general controlling of operations and functions of the business entity. Systematic management include giving an input and the necessary processes of production, outputs and the feedback from employees and customers that are useful for the continued improvement of the company. Colgate Palmolive created governance principles that ensured good governance and high business standards within the company and all the operating systems. They employed a strategy of morale boosting for the employees where they were paid per performance. This approach has the following set of features;
An organization is considered as system consisting of various components; task, structure, people and the environment. Colgate has the task of producing quality products. This must be realized through sound management; the people are the customers and the entire workforce. They must be satisfied and motivated to work. The business and the natural environment must be sustainable. These must operate as a system. Task refers to the nature of the jobs and technology used to perform the theory. Structure is the network of authority relationships within the subsidiaries. Environment sub-system is the aggregate of forces within which the other sub-systems operate.
The sub-systems of the organization systems are interconnected and interdependent. Therefore, all parts of the organization must be in balance with one another. The Colgate Palmolive Company must therefore be in harmony with its subsidiaries and contracted business partners. It’s the responsibility of the management to regulate and modify the subsidiaries so as to optimize performance. Management is expected to perform maintenance and adaptation functions. The maintenance function is concerned with ensuring the stability and efficiency of the subsidiaries. The adaptation function involves adjusting the subsidiaries to the changing business environment so as to make more tunes with the overall goal of the company.
An organization is more than the aggregate of the various subsidiaries (synergy). The focus should be on the performance of the Colgate Palmolive as a whole rather than on the subsidiaries in various countries. Systems approach as a business tool is an improvement of the classical theories since it’s close to the realities. The classical theorists viewed an organization as a closed system while the modern theorists viewed it as a closed one. The approach highlights the multi dimensions and multi disciplinary nature of management. This approach takes a wider and much broader perspective to organizational functioning. This provides a better understanding and a framework for the analysis of the company and its management. It put emphasis on the need for a holistic approach in problem analysis and an integrated management method. Systems approach focuses on dynamic interdependency between the specialized units within the helm of Colgate Palmolive management. Systems approach helps in understanding the complicated interlocked network of the various institutions and subsidiaries that form the Colgate Palmolive Company. The company has relationship with different sets of businesses like suppliers and those contracted to manufacture certain products of the company and all these conduct their operations in line with the mainstream company. They are involved in the competitive bid by the parent company and they in turn communicate their needs and expectations in line with the core value and objective of Colgate Palmolive. The companies’ values and objectives must be maintained and this means that all stakeholders must uphold the ethical standards and quality that is a characteristic of the company. To achieve this, the company must be involved in a continuous auditing process of the quality of products and services and an integrated management approach. They also conduct audits of the structure and facilities of these contracted suppliers and business partners in order to verify if their values and objectives are adhered to.
System approach paves way for meaningful analysis of the performance of the company and its various subsidiaries throughout the globe and their management. It provides path for synthetic thinking that draws influence from the managers who in turn influences the organization and the various subsidiaries. The managers must take into consideration the interdependence, interactions and interrelationships among the various subsidiaries on the other hand and the external realities on the other hand while making decisions (Murugan 42). This approach facilitates both the process of analysis and synthesis and differentiation and integration by relating the subsidiaries with the main company from the lowest to the highest level. Systems approach to management also integrates various approaches to management in a positive way.
To ran a company like Colgate Palmolive successfully, there are so many things that must be done pretty well, the company must create and communicate a vision from the entire company including its subsidiaries, establish long-term goals and values, create and implement business strategies, develop products and services that meet the values and needs of the customers, hire and train competent employees and seek an excellent system of solving the ever arising problems. Colgate Palmolive Company has established a mechanism of addressing all that. They have created a well-integrated set of goals, values and principles that serve as a unifying theme to integrate everyone within the company and the management real/system around customer satisfaction, inspiring and empowering employees so that they maybe innovative enough to produce superior financial results. They have also set up a mechanism of communication with the customers, business partners and other contracted manufacturers with a bid to improving their relations and values. Also put in place is the mechanism of getting and sending feedbacks from customers and other stakeholders in the business.
Since the inception of this style of management at Colgate Palmolive, the company has had more integrated approaches and practices that have been beneficial to them. The company has so far benefitted in the sense that they are not limited to one approach for problem solving like issues to do with international business activities, any conflict of interests if any, issues to do with environmental, health and safety principles, product research on its safety and advertising guidelines and policies; they can pick the most appropriate tool for each situation.
For Colgate Palmolive Company to continue making products that are free from defects, they must ensure that there is a lot of quality in production, and for them to be very competitive, these products must not only be of good quality but must be produced at the lowest possible cost and the fastest cycle time possible. These again must be matched with the ever changing needs and expectations of the customers. To meet these challenges, the company requires a broad, cross-functional leadership in order to develop a well-integrated process and a more integrated systems approach to management that will ensure that all functions are optimized around making sure that customer values are incorporated. This will require the senior managers and directors to develop more of a cross-functional viewpoint, but the senior most managers or director should facilitate the team to further develop and implement the approach. The company has used well-established engineering principles to design and maximize the effectiveness of the system of operation and management. Approaches such as quality standards and appropriate information technology have been employed to operate in the whole system of management into a well-integrated, cross-functional unit. This approach of management requires an integrated approach of creating value for customers and understanding the objectives and values and how the company should run as a system. Before implementing this management approach, the company laid down their values that are critical in their operations and which are the foundations of their business operations: they developed a value, that of caring about people, whether customers or shareholders or business partners in order to bring in the acts of passion, compassion, integrity and honesty that has characterized the company since its inception. Colgate Palmolive Company has put in place different strategies to realize the above goals and commitment to customer values, they recognize them as the factor in the success of their products and the feedback that the company receives from them is useful in making improvement on the quality of the products in order to remain competitive (Colgate). Given that the company employees are way above 38,000 people from different walks and cultural backgrounds, the company has employed such tools as knowledge management to tap their knowledge, skills and expertise so as to gain a competitive advantage (Colgate). This tool of systematic management is employed within the company in order to employ and retain the best people in the field, and to bring diversity in the workforce in terms of professionals. The company believes in teamwork through knowledge sharing aided by appropriate technologies and talent search so as to maximize on achieving profits that are sustainable. Customers’ values and expectations within the company are met through continuous improvement that the company makes after receiving feedback from them. Better understanding of their customers has endeared the company to great heights in terms of product quality, services as well as global recognition. The company has also concentrated on sound financial management. Financial management is more concerned with the availability of monetary resources at the required time. It involves estimating the volume of funds required for both long term and short term needs of the company, selecting the appropriate sources of funds, raising the needed funds at the right time (Murugan 38). The management must ensure that there is proper utilization and allocation of raised funds and the credit-worthiness and profitability of the business and proper administration of the proceeds. Financial planning involves proper planning, organization and controlling the financial resources. This must be done in a holistic perspective involving all the systems involved in the continuous operation of the whole company. Sound financial management has been coupled with proper employee management, that is, human resource and personnel management. This must be done in order to achieve the core values of the company, that is, the value of care, global teamwork and continuous improvement of products since the core value of systematic management approach is customer value orientation business culture. Personnel Management involves planning, organization and controlling the procurement, development, compensation, maintenance and integration of manpower of an organization. It involves planning for the human resources, proper recruitments, selection of qualified employees, routine training and appraisal, promotions and transfers of performing and underperforming members of staff, compensation of employees, employee welfare services and keeping proper records and doing research about human resource development
Since the systematic approach of management that is employed in this company revolves around the values of customer satisfaction, so many programs have been put in place to realize this. One of the most beneficial programs in terms of the number of beneficiaries has been the school going children program of brighter future with Colgate. This program promotes oral health among school going children through education and prevention. Through partnership with other global stakeholders like governments, professionals and international non governmental organizations, millions of children have enjoyed the benefits of this program. Other programs so far include women games which bring women across the globe in various sports including athletics which are meant to give a sense of identity and belonging within the society. The program also aim to impact positively on them through making them realize the importance of achievement in educational sector and also by providing a platform for those who want to take sports as a career to develop their talents.
Systems approach has brought a lot of setbacks sometimes in the management within Colgate Palmolive Company. The systems concept sometimes appears to be abstract and vague. The very many channels of subsidiaries that are to be treated as sub-systems make the overall management tiresome and costly. It complicates management sometimes as it is not clear sometimes what to do to effect the overall desired change in the system.
An interview with a factory manager at Colgate Palmolive Company, a Mr. Alan Phillips, who has worked with the company for the past two years, reveals that his priority in management has been planning, budgeting and most importantly developing continuous improvement program. He points out to the challenge of maintaining the profit margin given that the company had realized a profit gain. Given that during the last phase they cut about 35% of the jobs, he points to the fact that such a move brought insecurity among the workers and they had to move in to at least encourage and motivate them (Pycraft 33). He points out that to keep the same profit margin given that there was 35% job cut, resources had to be applied differently; the customer service must be 98% in terms of deliveries made in full time basis. He says that the continuous improvement is dependent on staff performance, the improvement of product formulation and the improvement of processes. This is a confirmation of the type of management approach that is operational at Colgate Palmolive, that of systematic approach.
The company has divided the staff into categories so that it can be easier to monitor them and offer other services like job training. To maintain loyalty and stimulate their interests in job, the company invests in education and job training for the member of staff. They are divided into core, core +1 and core +2 workers. The core workers include forklift drivers and are low skilled. They are taught English and basic arithmetic (Pycraft 33). Machine operators are core +1 and are also taught artisan skills. They can charge machine settings and perform minor maintenance. Core +2 workers function as team leaders and supervisors and are taught leadership and basic business skills. Workers are encouraged to seek promotion and acquire as many skills as possible.
The company encourages training and education of the members of staff and this is done in different languages with a curriculum of many courses which are covered either as practicum, through e-learning as a mainstream classroom learning practice. Most of these courses revolve around the core principle of the company and are offered in a semester basis every year.
Challenges in management
Managing a company like Colgate Palmolive Company with so many subsidiaries across the globe presents lots of challenges. There are differences in styles of management among the different subsidiaries given that the managers are from different cultural backgrounds and their education and training are so diverse. The business operation environment is also so different; this will result in a twist in mission and strategy in order to fit in that particular business environment. This brings about difference in structure form that of the parent company for example managing the retail outlets across the globe brings in challenges since the subsidiaries are responsible for their outlets. These differences occur in application but not in principles since the principles of management are set by the top brass of management, the board of directors of Colgate Palmolive Company that is based in New York. The differences are not tremendous in tasks and challenges since they all spend time on people problems and the problems are always the same everywhere. Majority of what they are concerned within these companies are generic. About 10% of these problems may occur between the company and non business organizations such as banks and only about the last 10% of the problems have got to do with trying to fit certain practices into the specific mission, culture of the company in order to reflect its history and tradition of quality products and services.
For Colgate Palmolive Company, managing the foreign based companies is a challenge. Managing the foreign currency exposure is increasingly becoming so critical and difficult. It requires total centralization. No one subsidiary can be permitted to handle its own foreign currency exposures. But the in the same subsidiary servicing the customers, a complete local autonomy is required that goes beyond the traditions of the company. Each of the individual service people has to be the boss with the rest of the company taking its direction from them.
Certain forms of research require a strict functional organization with the entire specialists playing their instruments by themselves. Some other kinds of research, especially that which requires decision making at an early stage like research on the oral care and soap products, teamwork is required from the beginning. And the two forms of research normally occur side by side within the company at all the times as the company works in a continuous system.
The other challenge is that of principle. A company should be transparent in its style of management. People have to know and have an understanding of the company and its structure that they have to work in. this may sound obvious but it is far too often violated in the company. Individuals will be able to work at one time and the same time in different structures within the company. For one task they will work as a team but for another task they will have to work and at the same time in command and control of the structure. The same individual who may be the boss within the team is a partner in an alliance with the rest of the company. The company in other words will have to become part of the executive’s toolbox.
Colgate. Valuing Colgate people. Web.
Murugan, Sakthive. Management Principles and Practices. New Delhi: New Age International Publishers, 2004.
Pycraft, Mike. Operations Management. Pretoria: Pearsons, 2000.