Proctor and Gamble
Why did management at Proctor and Gamble allow the management to grow prior to Lafley?
Proctor and Gamble has undergone costly restructuring. Upper management has forgotten that “Strategic management is defined as the set of decisions and actions that result in the design and activation of strategies to achieve the objectives of an organization” (Pearce & Robinson, 2005, p. 1). Proctor and Gamble has lost focus of their strategic management planning which involves maintaining the company’s mission and goals and looking at the company’s internal conditions and capabilities. The company became management top heavy. Lafley described this as been too invested in their employees. When a company acquires another company, one is also acquiring the other companies’ management team. Proctor and Gamble over the past century has acquired Folgers Coffee, Norwich Eaton Pharmaceutical, Richard- Vicks, Noxell, Shulton Old Spice, Max Factor and Iams Company. In 2005, Proctor and Gamble also acquired Gillette. No wonder the present management team had to eliminate 9600 management jobs. One of the ramifications of cutting 9,600 jobs is that a competitor may think that Proctor and Gamble is in trouble. Proctor and Gamble was correct in its decision to eliminate 9,600 which cut its payroll. When a company is trying to get fiscally healthy, and looking at ways to cut overhead cost: the first area to look at is the payroll budget.