The launch of a new product or the introduction of a new organizational initiative are examples of changes that can take place at a company. Hence, enterprises have to ensure they have enough resources and capabilities to not only control such transformations but make them effective. This report is going to analyze the approach Procter&Gamble (P&G) takes to introduce change. Moreover, the paper will focus on the role of leadership in change management as well as critically examine the importance of ethics in the design of change.
In order to understand the strategic decisions of Procter & Gamble, it is crucial to examine the history of the company. Both immigrants, William Procter and James Gamble started a new business venture specializing in soap and candles in 1837 in Ohio (Butler, 2020). The first half of the 19th century was not the best period to launch a company since it was a time of a detrimental recession that significantly hurt the U.S. economy. However, despite the challenges presented to William and James, they managed to compete with established businesses on the market by ensuring their enterprise always had an advantage. P&G invested in the future by shifting its focus towards research and innovation. Nowadays, the company includes more than 20 well-known brands, which customers love all over the world. Brands such as Always, Gillette, Oral-B, Pampers, Ariel, and many others are sold internationally in nearly 190 countries and territories (Horowitz, 2011).
The P&G corporation operates in 70 countries and employs more than 100,000 employees. It is also important to note that P&G brands serve more than 4.2 billion customers every day, which makes the enterprise one of the most successful and profitable globally (Butler, 2020).
From a small business in the field of candles to a billion-dollar corporation, it is evident that Procter&Gamble has grown and transformed immensely over almost 2 centuries (Brown and Anthony, 2011). P&G has recently decided to add a new vector to its operations due to environmental concerns troubling the public over the past couple of decades. Thus, the enterprise started to make itself accountable for the imprint of its business operations on the environment. As a result, P&G developed new initiatives to improve the lives of their consumers and ensure the planet is preserved and protected (Ozkan, 2015). Incorporating sustainability initiatives into the company’s strategic objectives led to a number of transformations, which required P&G’s senior leadership to generate efficient frameworks to introduce the change in corporate behavior.
Sustainability at P&G
Procter&Gamble has a long history of supporting environmental causes and incorporating sustainability problems into its strategic plans and objectives (Dasari, 2009; Luca, 2016). Despite criticism (Jordan, 2020), the company has developed product policies and created innovative practices for manufacturing and supply chain management in order to meet the goals of sustainability. In 1952, for example, the enterprise established the P&G Fund that distributed money to several U.S. charities. In 1989, Procter&Gamble donated close to 20 million dollars for the development of a composting infrastructure in the United States. Recently, the company decided to make more radical changes, which have had a lasting impact on the majority of activities and structure within P&G, in order to ensure sustainability.
Procter&Gamble is a corporation, which specializes in mass consumer goods, which is why its sustainability initiatives started with the products and ingredients. The next step for the enterprise was ensuring that the sourcing process was responsible, which required P&G to implement programs reducing the company’s environmental footprint across the supply chain. As of 2020, the corporation is working towards reaching its long-term goals regarding the implementation of lasting solutions to battle the lack of concern about social and environmental sustainability (Procter&Gamble, 2020). As a result, one of the biggest initiatives supported by P&G is the development of the company’s capability to replace petroleum-derived materials with renewable ones.
In order to achieve such a change, P&G leadership embedded sustainability across an array of operating procedures and existing practices. The company has an enterprise-wide framework for managing change related to its sustainability efforts. The corporation’s senior leadership clearly communicated the long-term objectives and mission of P&G in relation to sustainability and requested comprehensive commitment to these goals from employees. Although these efforts to introduce organizational changes were somewhat effective, only senior-level leadership demonstrated high levels of commitment to sustainability, according to the Sustainable Culture and Leadership Development (SCALA) survey (Luca, 2016).
The entry and mid-level P&G employees identified that the lack of leadership support and funding for sustainability projects, as well as resource limitations, served as the main challenges to the implementation of sustainability initiatives.
Therefore, one of the best alternative approaches for Procter&Gamble to introduce sustainability efforts is facilitating a positive climate and environment for innovation (Cooper and Mills, 2005). This way, senior management could foster cross-functional teams and support them with resources and feedback. In order to achieve that, senior managers would have to be accountable for managing gate meetings, reporting to initiative success managers, as well as participating in strategic development sessions.
The Role of Leadership in Managing Change
Organizational change implies the intentional effort of a leader (or a group of leaders) to take their enterprise towards long-term agility. As a result, companies can better respond to future trends, social changes, and technological advancements (Abbas and Asghar, 2010). Scholars agree that leaders play a central role in transforming and cultivating an organization (Abbas and Asghar, 2010; Gill, 2010; Mehta et al., 2014; Al-Ali et al., 2017). A leader does not only address the change to the team but to predict possible alterations or employees’ concerns addressing them as well (Al-Ali et al., 2017).
The vision of the leader is one of the most important aspects that can provide employees with a final goal and a trajectory to achieve it (Griffin, Parker, and Mason, 2010). In conclusion, the role of a leader in organizational transformation is to address the change and give employees all the necessary support (van der Voet, 2014). Leaders also provide motivation and resources for their followers to participate in the changes.
The Importance of Ethics
Change is disruptive, which requires leaders to take into account everyone involved in the transformation and ensure employees’ interests are protected during organizational shifts (Lewis, 2020). At Procter&Gamble, entry and mid-level employees struggled to ensure they have enough time to engage in new practices incorporated by top management. Therefore, P&G leadership has to establish open and honest communication channels in order for employees to address their concerns (Burnes and Oswick, 2012). Moreover, according to Burnes (2009) and Cameron (2017), apart from an ethical aspect of communication, well-structured communication networks help managers to address the purpose of change.
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