Académique Documents
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Case Study
Antanenka Maryia
Medvedeva Andelika
Mialeshka Maryia
Miller Hanna
Prakapait Dominyka
Rybakovait Simona
year II
26/04/2017
P&G GLOBAL BUSINESS SERVICES CASE
2
Table of Contents
Introduction..........................................................................................................................3
1. Situation Analysis............................................................................................................4
1.1. Introduction..............................................................................................................4
1.2. Company History.....................................................................................................4
1.3. Introducing GBS......................................................................................................5
1.4. Employees................................................................................................................5
1.5. Case Issues and Challenges......................................................................................6
1.6. Situation Conclusion................................................................................................7
2. Problem identification.....................................................................................................7
2.1. SWOT analysis........................................................................................................7
2.2. Mind Map and Theoretical Framework...................................................................9
3. Scientific Article Presentation.......................................................................................12
5. Alternatives and Evaluation...........................................................................................14
5.1. Possible Alternatives..............................................................................................14
5.2. Evaluation of Alternatives......................................................................................15
6. Solution..........................................................................................................................18
7. Conclusion.....................................................................................................................22
References..........................................................................................................................24
P&G GLOBAL BUSINESS SERVICES CASE
3
Introduction
focused on a largely distinguished number of products. The company holds such titans as
Tide, Ivory, Crest, Always and many more household goods, food and beverages brands.
The phenomenal annual revenues of P&G, more than $4 billion, as well as almost
100,000 employees give a picture of a truly successful corporation, that is why it was
Like many other global companies, it is orientated towards the commitment to its
growth. Keeping strong relationship between employees and the management board
creates an outstanding organizational culture. The culture which drives workers, dedicates
all their power, reveals their most valuable capabilities. And if the company decides to
achieve even bigger revenues and do this by reorganizing its operations (in this case
change in what way the Global Business Services is connected to the company), the
organizational culture may certainly suffer from that. Global Business Services (GBS)
unit was established as a part of larger reorganization and transformation at P&G and it
For that moment, the executives strived to grow more and changes for GBS unit
were inevitable (even though it already saved a vast amount of money for the company)
as long as the situation demanded it as it would result in more immense cost savings
afterwards. In the situation analysis below it would be showed in details that if the
company decides to undergo a reorganization, due to those changes for GBS, it would
P&G GLOBAL BUSINESS SERVICES CASE
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most certainly have to find ways to keep organizational culture on the high level. by
The aim of the paper is to analyse the problem presented in the case, to suggest
the most appropriate alternatives to it, evaluate them and finalize the report with the
solution that would be projected and considered to be the most advantageous. Several
tools will help in the clarification of the situation and the development of the solution;
they include SWOT analysis, drawing of Mind Map, supporting all with theoretical
framework most suitable to the case and the problem itself. At the end, the paper will be
finished up with the conclusion overviewing the challenges of the case and advantages of
given decision.
1. Situation Analysis
1.1. Introduction
The situation analysis described below will introduce the readers with
important facts and information about the case including a brief history of a company,
description of GBS unit, employees motivation, and thus point out several case issues
and challenges.
Procter & Gamble history starts in Cincinnati, USA in 1837 which was a
relatively tough time to start a business, however P&G maintained their goals and built
up the prosperous business. It was founded by brothers-in-law William Procter and James
Gamble. Paradoxically, they would have never met if they had not married the two
sisters, Olivia and Elizabeth Norris. Their father-in-law persuaded them to become
P&G GLOBAL BUSINESS SERVICES CASE
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business partners and sign a partnership agreement. The company started as a small
family business selling soaps and candles and developed to a consumer products industry
giant for cleaning agents and personal care products which, nowadays, holds mainly
globally recognized brands such as Tide, Always, Crest, Pampers, Pringles and many
Interestingly, by year 2002, thirteen of P&Gs brands, each one with over one
billion in sales would rank in the top 70 companies on the Fortune 500 list, if separated
from the parent company, which proves that innovativeness and dedication are at the core
of the P&G business and that the business itself is very stable and truly deserves to be on
Procter & Gamble wanted to transform the way their business is done. And they
order to do that, they had to reorganize their company and compiled a team of more than
seven thousand proactive employees leading change and helping to drive business. After
the reorganization, all the services indicated above were able to work accordingly and as
one separate entity, consequently being more efficient and taking advantage of synergy.
Resulting from that, in late 2000, GBS achieved significant cost savings for the company
(hundreds of millions). However, those achievements anyway have lead many P&G
executives to have concerns about continuing their investments in GBS. With all of that,
they proposed to make some additional changes and outsource all the possible operations
1.4. Employees
One of the most crucial factors leading to P&Gs growth and success over the
years was the great devotion of its workforce and commitment of its employees. The
work. To many residents of Cincinnati at that time, having a position in P&G was the best
guarantee of job security and high job satisfaction. The employees were the ones who
Time has passed, GBS has already been operating for some time after
introducing it in 1999, showing outstanding results. However, the executives found out
that there is a way to be more efficient and productive in the way the unit works; they
pointed out several options (firstly thirteen, then reduced to four) how to do that. One of
the options was to spin off GBS as a separate business outside of P&G, another one was
to outsource all of GBS in one deal to one partner. Nevertheless, they were considering to
retain GBS in-house as well as it will preserve all the control over its people and
Any change in the companys structure and the way it works always brings
many challenges, and in this case, it also brought a couple of them. Issues mainly were
caused in regard to the workforce and human resources, the people who were the core
value and the most important asset of P&G. Outsourcing GBS or spinning it off would
designate that the employees might have found themselves working for other company.
They would most probably feel betrayed and unfortunate as they worked with the full
P&G GLOBAL BUSINESS SERVICES CASE
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devotion and dedicated themselves to constantly produce value for P&G. The fear of
being laid off would also be in the mind of majority as long as the reorganization is
always a tricky thing and chances that some people would be let go are quite high. All
those things are very challenging and should be kept in mind, worked through and
developed when the management board would come up with the final decision. Concerns
Overall, the company had to decide upon a major issue, and, at the same time,
to work with the employees uncertainty and their resistance to change due to the decision
that could be undertaken; at the same time keep their values as they were brought to the
people initially in order for them not to feel unhappy with the possible solution. The
decision was tough as long as the organizational culture, which was building up many
decades and was quite successful, was definitely at risk. Further in the paper, the case
would be analysed more deeply giving readers better understanding of how the concerns
have appeared, understanding of strengths and weaknesses of the situation, pros and cons
of the alternatives and following up with the best solution that should be made in the
given case.
2. Problem identification
From situation analysis part, we can see that there are some weak and strong
points in the organization. To analyse company more precisely and make inferences from
information which was mentioned in situation analysis part, we need to use analysis tool
P&G GLOBAL BUSINESS SERVICES CASE
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perspective, therefore it is focused more on internal issues, which are strengths and
Strong Culture;
Job security and satisfaction;
Loyal employees;
Good public image.
There are strengths which were mentioned in the case and situation analysis part.
Firstly, P&G has a strong culture. P&G ensures that set of values and norms which exists
is shared widely and rooted deeply, that is why for every employee who joins the
integrity, passion for winning trust, are explicit statements which describe the
organizations values. New employees are screened carefully to ensure that they fit in the
culture: We attract and recruit the finest people in the world. Secondly, job security and
satisfaction are guaranteed for each employee: Being hired by P&G was the best
guarantee of job security and satisfaction. Moving on, P&G can boast its big number of
loyal employees who had been with the company for 20-plus years. Last but not least,
P&G has its own history and is well-known worldwide and it owns good public image:
The company was often recognized by national publications as a great place to work.
Weaknesses. As the company has several strengths, it also possesses few weaknesses,
From the weaknesses side, we can see that P&G company has a lot of facets that have
to be improved. P&G had issues with negative employees reactions: Many employees
felt betrayedpeople were very upsetsome of the GBS employees even quit their
jobs. Before announcing, David Walker did not have any strategical plan how to deal
with employees concerns and what future was waiting for the GBS employees. As a
consequence, most employees were very shocked by the news and felt anxious. What is
more, after announcing about GBS outsourcing many of the employees were
understandably concerned about their future at P&G, as was mentioned in the case:
Employees spent many hours speculating with their co-workers about whether their jobs
were safe and when the transition, if it were to happen, would take place.
To start with, this case shows that there are some employees who accept the
develop skills with the new company. Also, some workers are expecting to get a higher
salary, that would help them to pay for their children education. Thus, SWOT analysis
allowed seeing that the core problem of Procter & Gamble company is with the remained
P&G GLOBAL BUSINESS SERVICES CASE
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part of employees who react negatively due to uncertainty. The theory of resistance to
change (Greenberg & Baron, 2000) must be applied in order to find out causes of the
situation. There are five factors. The first one is an economic insecurity, which causes the
potential threats to livelihood of the employees. The second is fear of the unknown. It
describes the negative emotions and panic of workers when well-established patterns are
disrupted. It often causes unfamiliar conditions, a state of affairs that often is rejected.
The third factor is threats to social relationships, which describes a strong relationship of
workers to one culture and how hard is to change the work environment. The fourth
factor is habit. It describes the affection of employees to one job position and the
resistance to develop work skills. The last one is failure to recognize need for change. It
shows the workers' recognition to change in their organizations but they keep the things
2.2.1. Economic insecurity. This is the first branch, which was made using
information from the case. This branch means that a lot of workers are afraid of losing
their job position and scared of the salary reduction. This is because employees have
spent too many years in one company where they were feeling secured. According to the
case, the employers want to keep almost all capital resident within GBS but they are not
sure if all employees would retain the same job position. Also, it was mentioned that
P&G company always offered generous benefits packages. It means that they proposed
a good salary. On the other hand, now the company does not know if it can apply the
2.2.2. Fear of the unknown. The second branch is about the fear of the
employee's future. For many years, workers knew their responsibilities. They did not
P&G GLOBAL BUSINESS SERVICES CASE
11
think to leave their job position or go working for another company. Moreover, day by
day, they were doing the same things in the company and they got used to the companys
rules. As a result, when the changes have been announced (without any following
explanation about the employees future) employees were in panic and shocked. They
were feeling like thrown out of their comfort zone. That is why the negative approach
2.2.3. Threats to social relationships. The third branch is about the strong
cultural values. Procter & Gamble company pays a lot of attention to their employees.
For them employees are the core value. Employees and their managers always
groups. All employees always feel appreciated equally. As mentioned in the case, Procter
& Gamble company act on the conviction that the men and women of the company will
always be the most important asset. That is why, when the decision was announced, a lot
of workers felt sold off and betrayed because they put a lot of efforts and time in order
to save money and maximize profit of P&G. Moreover, a lot of workers were scared of
changing their position in other company because they got used to communicating and
working in an open way. As a consequence, some people decided to quit their job.
2.2.4. Habit. The fourth branch is about the job that people learn and do
constantly. Sometimes the job can become so habitual that is why it is easy to perform it.
According to the case, an employee from New Jersey was a part of P&G community
almost 28 years. She did not have intention to leave her job until retirement. This
example reflects strong commitment to job position. The habitual feature of the work
P&G GLOBAL BUSINESS SERVICES CASE
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performed in P&G company for the majority of employees is one of the hardest things to
allow to change.
2.2.5. Failure to recognize need for change. The last branch is about the need to
be prepared to adapt to new things and embrace change. They should frequently re-
evaluate their business model and question the suitability of approaches and strategies,
which are exercised to reach long-term objectives. Even though the main value for
Procter & Gamble is their employees, but at the same time they should maintain high
profits and try to improve their companys business strategies. The P&G situation proves
that some part of workers can accept the new challenges in the workplace. They see the
opportunities to grow and develop their skills. On the other hand, the other part sticks to
According to the theory, the uncertainty about the employee's future is widespread
problem which has to be solved. These five factors of the theory show the main reasons
why employees are feeling so gloomy and disappointed. The goal of managers should be
understanding and helps to cope with changing factors. In order to manage and keep the
Change is inevitable part of organizational processes and has both inside and
outside influence on the company. According to Procter & Gamble: Global Business
Services article, the main issue that P&G faces is how to handle the reactions of their
GBS employees. The employees resistance to change is the problem identified in the
P&G GLOBAL BUSINESS SERVICES CASE
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article. The analysis of scientific article of Stensaker and Meyer "Change experience and
employee reactions: developing capabilities for change" gives a clear insight into how
change.
employee reactions: developing capabilities for change" aims to examine how exposure
to more frequent organizational change may lead to a more positive reaction to a change
and whether individuals develop change capabilities (Stensaker & Meyer, 2011, p.
107).
program were sampled for the pilot study. In focus groups of four or five participants 30
top and middle managers of Scandinavian companies were sharing and discussing their
from the pilot study lead us to believe that employees experience could be important for
planned changes were chosen for two subsequent studies. In the first study 30 interviews
were conducted in banking and insurance companies and participants were asked about
reactions and different ways of managing change. In the second study, pharmaceutical
and postal services companies were targeted and 20 participants were interviewed in
All interviews were semi-structured and lasted approximately 90 minutes (ibid, p.110).
Firstly, the findings show that experienced employees do not actively resist
change, but instead show loyal reactions (ibid, p.121). Secondly, the study indicates that
P&G GLOBAL BUSINESS SERVICES CASE
14
capabilities also at the employee level, by generating an ability to cope with the
uncertainties of change, maintaining control and increasing ones own market value
(ibid, p.121).
These implications are relevant not only for P&G employees, who are resisting
organizational changes, but also for managers who play an important role in facilitating
the development of employee change capabilities (ibid, p. 121). Since P&G employees
should perceive changes as process-based learning, which enrich knowledge and develop
Due to aforementioned theoretical analysis, the key P&G internal problem is GBS
fear of the unknown that leads to the resistance to organizational change and triggers
negative reactions. To cope with the issue, alternatives are provided and assessed.
consequences of changes and be aware of the benefits or costs that changes will bring.
by managers. As the involvement through employees feedbacks did not help and was
time-consuming, this alternative provides a new and quick method to involve employees
uncertainty of employees future and avoid their potential losses, real contracts and
5.1.4. Stress management. To deal with changes, employees need low levels of
stress.
P&G GLOBAL BUSINESS SERVICES CASE
16
sensitivity Future
Webp investmen
age platform t
with news and
exact plans and
consequences for
employees
(benefits exceed
costs),
educational
materials and
also connections
after outsourcing
Prom
ote open
organizational
culture, risk-
taking attitudes
and alter
companys
values
c) Making status quo
uncomfortable:
Provi
de data that
current GBS will
not be capable to
deal with scopes
of work to attain
future goals
d) Training:
Ensur
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training if job
position will
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managers if Might
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strategic plan. In es fear of
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habitual
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5.2.1. Inferences from Alternatives. It is clear from benefits that all alternatives
deal with employees uncertainty and resistance to change. However, analysis in the table
shows that they differ by efficiency and possible difficulties. Therefore, the most helpful
6. Solution
Taking into consideration that employees are one of the most valuable asset of the
company, making sure that their well-being is protected and ensuring them in their safety
are vital objectives for the managers during the period of decision-making in terms of
P&G GLOBAL BUSINESS SERVICES CASE
20
employees future that subsequently triggers fear, resistance, turnover and eventually can
lead to the result of low productivity and decline of the outsourcing option that could lead
benefits that it can potentially bring to the company, which make employers and
employees better off simultaneously. Having aforementioned aspects in mind, the puzzle
needed to be solved by the company is reflected in the alternative that can mould
the issue of uncertainty. For that task the alternative number one Employee education
fits the most due to its informative nature. Uncertainty by the definition implies little or
no knowledge about the future, in case of P & G it refers to the situation when employees
experience fear and resistance due to absence of relevant information about outsourcing
steps and benefits based on what they could make rational decision. The advantage of the
conflicts of interest and relatively low costs comparing to other alternatives because it
supports outsourcing that will make company more efficient and profitable according to
the information provided by the case. Employee education consists of strategical plan
implementation that includes step by step description of how exactly the change is going
to be implemented, which will allow employees to scrutinize the change from multiple
angles and be informed to the highest degree. Communication part of the solution is vital
because of its emotional aspect that will help to get closer with employees and explain
them the need for change not only from quantitative point of view but also from
qualitative. Managers will communicate with employees on constant basis with help of
P&G GLOBAL BUSINESS SERVICES CASE
21
meetings, web-page, value-booklets and make sure that the majority of employees will be
quite informed about all advantages of the outsourcing. The aspect of making status quo
uncomfortable can be very useful in psychological sense, because company will make
clear the presence of all disadvantages triggered by refusal of change, that eventually will
decrease the fear of leaving the old work habits. Finally, trainings are crucial for practical
knowledge acquiring, that will create safety pillow for the employees, who might face the
alteration in their job requirements, providing the actual skills for the changed work
environment. The cost assessment of the alternative implies time resource and
management, because of meeting arrangements, the IT services for the web-page and
hiring training people, however compared to the rest of alternatives these costs are the
most manageable. Therefore, the description of solution is provided in the table below:
7. Conclusion
After analysing the case, there were several lessons learned. First, it is important
to keep organizational culture on high level and keep the same commitment to your
employees if you are the manager or owner of the company. In the P&G: Global
Business Services case, we used the Resistance to Change theory in order to find out
the main causes of the problem. It allowed to understand that workers are devoted to
P&G. They feel strong commitment to the culture of the company and job position. That
is why it is hard for them to accept outsourcing and changes of the company. They felt
betrayed and disappointed. Even though, employees are considered the most important
value in P&G, the workers should always be prepared for unexpected changes because
company should always be profitable and innovative, so the changes are inevitable.
necessarily resist changes, but instead show loyal reactions. P&G employees should
perceive changes as learning process, which definitely enriches their knowledge and
From the alternatives that we indicated it is quite visible that they differ by
efficiency and possible difficulties; employees uncertainty and resistance to change were
primarily discussed. It was decided to choose the alternative which requires the lowest
costs and that alternative is Employee education. The precise description of the solution
was provided which proved that the option chosen is very beneficial and requires
relatively low costs and can resolve many issues in regard to uncertainty of the people.
The employee education solution implies three main aspects: informative nature,
employees and furthermore makes them motivated and willing to undertake all necessary
References
Boguslauskas, V., Kvedaraviien, G. (2008). Strategic outsourcing plan and the structure
of outsourcing process. Engineering Economic, p. 60-66.