Introduction of Company

Company Background and Establishment

Procter & Gamble was formed in 1837 when brother-in-laws James Gamble, a soap maker and
William Procter, a candle maker joined forces. The firm’s starting capital was $7,192.24 and
they agreed on a 50/50 distribution partnership (American Chemical Society. 2007). Formation
of the company coincided with the economic expansion of the United States. Their first products,
soap and candles, were transported by steamboats down the Ohio River to Mississippi and New
Orleans. By 1850, the company was able to expand their distribution to additional markets using
railroads. In 1879 the company was forced to eliminate its candle making when consumers
switched to kerosene. The company expanded its soap making to stay competitive by
experimenting with developing a castile-like product that was inexpensive enough to be mass
marketed. Ivory Soap was the answer. The soap was made from coconut and palm oil, lathered
easily, remained solid and lasted longer than other soaps. The company aggressively marketed
the new product and the success of Ivory led Procter & Gamble to being a multi-million dollar
industrial icon. In the 1930 and 40’s, the company utilized technology and chemical
experimentation to expand its product line into synthetic detergents that were marketed globally.
The company introduced Dreft and then Tide. Now it was no longer consider just a soap
company. The company later began to make personal-care items such as toothpaste, shampoo,
and deodorant; food products such as cake mixes and coffee; and miscellaneous products such as
cellulose pulp and chemicals.

Nature of Business

P&G operates through six industry-based Sector Business Units or SBUs: Fabric and Home
Care, Baby and Feminine Care, Family Care and P&G Ventures, Beauty, Grooming, and Health
Care. We manage our 10 product categories within these SBUs. The SBUs have sales, profit,
cash and value creation responsibility for our largest and most profitable markets, called Focus
Markets—accounting for about 80% of Company sales and 90% of after-tax profit. The SBUs

1
provide innovation plans, supply plans and operating frameworks for the Enterprise Markets to
deliver these mutually agreed business goals. Enterprise Markets are important to the future of
P&G because of their attractive market growth rates, and the intent is to accelerate this growth
and value creation. Supporting the SBUs, Market Operations and Enterprise Markets are key
corporate resources focused on scaled services, governance, stewardship and areas requiring high
mastery. This structure enables a more empowered, agile and accountable organization to
accelerate growth and value creation.

Vision & Mission

Procter & Gamble’s mission statement is “we will provide branded products and services of
superior quality and value that improve the lives of the world’s consumers, now and for
generations to come.”

The primary emphasis in this mission statement is the level of product quality that the company
considers minimal – superior quality. It shows that the company does not compromise on this
element to ensure its clients get maximum benefits. The statement has the following components:

 Distinguished quality
 Improve lives
 Improve communities

The vision statement of Procter & Gamble clearly indicates to “be, and be recognized as, the
best consumer products and services company in the world”. In this statement, the focus is
on the leadership duty this company has embraced in setting the pace for other similar
corporations. The statement has the following elements:

 Best consumer products and Services Corporation

 Global reach

Through persistence in maintenance and gradual improvement of its quality standards, Procter &
Gamble has managed to create a recognizable brand. In this way, this has made it the best in

2
what it does. To satisfy the second element in this vision statement, Procter & Gamble maintains
a pre-calculated global expansion approach that has seen it become a household name
everywhere in the world.

Primary Factors of Organizational Development

Direction Settings

At P&G, our Purpose, Values and Principles (PVPs) are the foundation of everything we do –
this includes Corporate Governance. Corporate Governance is how the management,
shareholders and Board of Directors ensure all investors—both shareholders and creditors—are
protected against managers acting solely in their best interest. Our governance consists of laws,
policies, procedures and practices that protect the well-being of P&G.

Non-discrimination Policy

P&G is committed to providing equal opportunities in employment. This means we must treat
our fellow P&Gers and P&G applicants fairly and never engage in any form of unlawful
discrimination. We follow all related laws and in our employment decisions (such as recruiting,
hiring, training, salary and promotion) we do not discriminate against individuals on the basis of
race, colour, gender, age, national origin, religion, sexual orientation, gender identity or
expression, marital status, citizenship, disability, veteran status, HIV/AIDS status or any other
legally protected factor.

Our philosophy

We have operations in nearly 70 countries and one of the strongest portfolios of trusted, quality
brands—used by nearly 5 billion people around the world. While we serve the world’s
consumers, we’re also committed to being one of the world’s most socially responsible
companies. P&G brands, employees, operations, and partners work together to make that
difference—by being more transparent, building collaborative partnerships, respecting human
rights, sourcing responsibly…generally doing what’s right. It’s what sets us apart.

3
Gender equality

We aspire to build a better world for all of us — inside and outside of P&G. A world free from
gender bias, with equal voice and equal representation for all individuals. A world where
everyone sees equal. When we do this, economies grow, communities are healthier, businesses
can thrive, and the world is a better place for everyone. At P&G, we’re focused on three areas
where we can have the greatest impact. First, we’re leveraging our significant voice in
advertising and media to tackle gender bias. We’re also removing barriers to education for girls
and economic opportunities for women through corporate and brand programs and policy
advocacy. And we’re creating an inclusive, gender-equal environment within P&G, while
advocating for gender and intersectional equality in workplaces everywhere, so that everyone
can contribute to their full potential. In each of these areas, we partner with highly-engaged
organizations that share our commitment, combining our resources, talents and skills to have a
bigger impact.

Diversity & inclusion

P&G is a Company that believes in diversity and inclusion. With more than 140 nationalities
represented in our workforce, our own diversity helps us reflect and win with the consumers we
serve around the world. The more we understand people, their needs and challenges, the better
we can delight them with our products and services. And while diversity is essential in all we do,
we believe inclusion changes the game. Every day we strive to get the full value of our diversity
through inclusion — fostering an environment where P&G people can be their best, full and
authentic selves in the workplace. But our job doesn’t end there — our belief and commitment
extend beyond P&G’s walls. We are driving action on the world stage to make a meaningful
difference, and we care deeply about our impact, always striving to make the world a little bit
better through our actions.

People / Employees
Employees are long-term investors

In 1887, William Cooper Procter introduced a profit-sharing program for employees. At the time,
he said, “We should let the employees share in the firm’s earnings. That will give them an

4
incentive to increase earnings.” He revised that program in 1903 to have the profit sharing be
awarded in the form of actual P&G stock. He reasoned that as employees became stockholders,
their economic interests and those of the Company would be bound more closely together. That
program still exists today, with a large part of each U.S. employee’s retirement consisting of
P&G stock. Additionally, virtually all employees own P&G stock or stock rights via various
investment programs. Because of this, employees’ economic interests are aligned with the
Company.

Our Executive Share Ownership Program requires senior executives to own shares of company
stock and/or restricted stock units valued at eight times base salary for the CEO, and five times
base salary for the other senior executives. Non-employee directors must own company stock
and/or restricted stock units worth six times their annual cash retainer. These compensation
programs help to ensure the alignment of the interests of our senior executives and directors with
shareholders.

Process & Tools

The following processes are undertaken into Procter and Gamble in order to ensure immaculate
adherence for the development of its human capital

Closely coordinate the factory and the core business

Leaders sometimes see efforts to foster new growth as completely distinct from efforts to bolster
the core; indeed, many in the innovation community have argued as much for years. Our
experience indicates the opposite. First, new-growth efforts depend on a healthy core business. A
healthy core produces a cash flow that can be invested in new growth. And we’ve all known
times when an ailing core has demanded management’s full attention; a healthy core frees
leaders to think about more-expansive growth initiatives.

Promote a portfolio mind-set

P&G communicates to both internal and external stakeholders that it is building a varied
portfolio of innovation approaches, ranging from sustaining to disruptive ones. It uses a set of

5
master-planning tools to match the pace of innovation to the overall needs of the business. It also
deploys portfolio-optimization tools that help managers identify and kill the least-promising
programs and nurture the best bets. These tools create projections for every active idea, including
estimates of the financial potential and the human and capital investments that will be required.

Create new tools for gauging new businesses

Anticipated and nascent markets are notoriously hard to analyze. Detailed follow-up with one of
the project teams that attended the pilot workshop showed P&G that it needed new tools for this
purpose. P&G now conducts “transaction learning experiments,” or TLEs, in which a team
“makes a little and sells a little,” thus letting consumers vote with their wallets. Teams have sold
small amounts of products online, at mall kiosks, in pop-up stores, and at amusement parks—
even in the company store and outside company cafeterias.

Make sure you have the right people doing the right work

Building the factory forced P&G to change the way it staffed certain teams. At any given time
the company has hundreds of teams working on various innovation efforts. P&G found that big
teams often bog down because they pursue too many ideas at once, whereas small teams are
better able to quickly focus on the most-promising initiatives. Having several members with
substantial innovation experience helps teams confidently make sound judgment calls when data
are inconclusive or absent.

Encourage intersections

Successful innovation requires rich cross-pollination both inside and outside the organization.
P&G’s Connect + Develop program is part of a larger effort to intersect with other disciplines
and gain new perspectives. Over the past few years P&G has:

 Shared people with noncompeting companies. In 2008 P&G and Google swapped two
dozen employees for a few weeks. P&G wanted greater exposure to online models;
Google was interested in learning more about how to build brands.

6
  Engaged even more outside innovators. It has expanded the program to forge additional
connections with government labs, universities, small and medium-sized entrepreneurs,
consortia, and venture capital firms.

Organization (Structure & Learning)

Professional Growth/Training

P&G is committed to helping its employees create mastery in all that they do. At our
headquarters, training takes place in the John Pepper Learning Center that was opened on June 1,
2003 or in the Pavilion Training Center. Employees receive formal training, on-the-job training
and coaching from management. These classes reinforce the company’s key skill areas including
leadership, solutions, innovation, risk taking, collaboration, capacity and mastery.

 P&G’s “virtual university,” RapidLEARN, enables employee’s worldwide immediate

access to online training which has been designed to increase skills and support career
development. There are over 6,000 learning items and 2,600 of them are web-based
training that can be taken at an employee’s convenience from their laptops. These courses
cover a wide variety of subjects including: corporate competencies identified to help all
employees succeed, interpersonal skills, technical mastery, personal computing, diversity,
and regulatory and safety standards for plant personnel. The participation rate in year one
was 5 percent; year two was 15 percent, and now in year four over 50 percent. P&G was
recognized by Saba, Inc. with the Saba Customer Award in the category of Highest
Measurable Impact.
 Global English—offered worldwide, teaches English as a second language. Global
English offers 700 hours of learning and supports 10 languages through the
RapidLEARN system.
 On-the-job training—this occurs because of the relationship built between the manager
and direct report, and is seen as key to success for each employee. On-going dialogue
helps the employee grasp new concepts, learn new skills, and understand expectations for
his or her role.

7
Personal Growth/Training:

 “Time Management”—this is a course licensed from Franklin Covey that deals with
taking control of your calendar, discovering your values and mission, and setting long
and short term goals.
 “7 Habits of Highly Effective People”—this Franklin Covey course will help increase
productivity by focusing on priorities/accepting responsibility, increasing collaborative
relationships and improving decision-making, innovation and problem solving
capabilities.
 “People and Communication Skills”—this in-house course helps develop their verbal
communication and influencing skills in one-on-one situations to improve personal
effectiveness in building productive working relationships.
 “Assertiveness Appropriate Behavior for Maximum Results”—this in-house course helps
employees develop strategies at all levels within the organization. It uses a personal
profiling system to learn effective techniques to help employees manage their greatest
interpersonal challenges.
 “Leadership and the Business of Thinking”—this course uses the Hermann International
“whole brain model” coupled with the Brain Dominance Instrument to develop skills that
will help individuals identify how they and others think and process ideas.

Secondary Factors of Organizational Development

Strategy & Goals

One of the most important and say efficient strategy of Procter & Gamble is availability of its
products. Products manufactured by this company are highly available worldwide and are being
offered and sold on convenience stores, super markets, hotels, motels, retailers, wholesalers, drug
stores and intermediaries. The product availability of the company gives it an edge and makes it
far superior that its competitors like Unilever etc. Consumers get products easily and effortlessly
when they are in need of a vaccine to make their life better. The availability and accessibility of
the specific products makes it brand brawny and hefty. This in turns makes customer loyalty
towards the brand much tough and muscular with time and targeted customers start trusting the

8
brand, and same is the case with Procter & Gamble. Supply chain of the brand is as strong as it
needs to be in order to result in a successful chain management.

Likewise many other competitors of the brand, P&G a further strategy is Research and
Development. Brand devote approximately $2 billion each year on its R&D department contains
8000 employees around the world. One of the professors, named Charles Fine suggested the
company to have a view on the world as innovation lab. Subsequently they start sourcing
innovation through valued supply chain network as they deals the customer on one on one basis
because of which they are rich on the drawbacks as well as the complains for products. This step
resulted in innovation success rate three times than it was before. To take advantage of the
advice, P&G also launched its own website which motivates and welcomes innovations as well
as feedback by the targeted customers, shareholders, stakeholders, partners and general public
for further enhancement of the products.

Another significant strategy being applied by Procter & Gamble as an efficient and effective tool
is change management. The company observes and on the blink of an eye takes action to bring
up the change and exploit the opportunity to meet consumer’s expectation on the very first place.
As competition is growing faster and fastest, very next moment involves business bodies in the
shock of sudden and significant change. P&G is a brand, who knows splendidly about their
vision. Company takes change management as its one of the most crucial and unavoidable
manner.

Nobody cares how much you know, until they know how much you care, said by Theodore
Roosevelt. This Famous saying that is being followed by P&G as it should be as it focuses and
devotes more of its attention and care to the products who works as stars in portfolio and because
of which entire corporation is enjoying free lunches, such as US market is strongest market being
targeted by P&G and they are continuously treating it as focal point with jam-packed devotion
and dedication in order to make it strongest. Furthermore, Procter & Gamble’s strategy is
concentrating on improving operations, at least better than competitors.

When introducing to one more line of attack of Procter & Gamble, it is essential to say that to
uphold and retain its brand image; it is all about captivating trust and confidence from the

9
targeted segment of market. At the end of the day, all the steps, strategies, planning, developing
and designing starting from a scratch is followed by a reason of winning trust and loyalty from
customers because when nothing else seems to be helpful, this tactic does and it is not a piece of
cake to get one’s trust.

One more strategy being introduced recently by Procter & Gamble is “Connect+Develop”. In
this age of advancement, where the whole of the universe has become a global village, the
connection is necessary for any company to float up in the lively market with its loyal
consumers. However, in this social age, in which each and every individual is socializing has
made us little more aware about our surroundings and circumstances taking place in this village.

Bruce Brown, Chief Technology Officer said “this strategy has helped us to deliver a number of
successful and leading innovations which has accelerated the growth of Procter & Gamble
critically”. The company is by hook or by crook managing to uphold this strategy and maintain
its prospering innovation rate.

Laura Becker, General Manager said that they wanted develop and connect themselves in order
to deliver products that has a greater level of innovation. Moreover, she also stated that a
category of products will be made that changes marketplace, and attracts customers which claim.

There are certain principles and supporting behaviors which flow from our Purpose and Values
and aimed to achieve the targeted goals.

We Seek to Be the Best

 We strive to be the best in all areas of strategic importance to the Company.

 We benchmark our performance rigorously versus the very best internally and externally.
 We learn from both our successes and our failures.
 Mutual Interdependency Is a Way of Life
 We work together with confidence and trust across business units, functions, categories
and geographies.
 We take pride in results from reapplying others’ ideas.
 We build superior relationships with all the parties who contribute to fulfilling our
Corporate Purpose, including our customers, suppliers, universities and governments.

10
Leadership
A team with the future in mind

Our leadership approach is distinctly P&G. We set a clear, rigorous course for developing
leaders and growth in every business and region, at every level. As a result, our diverse
leadership team is shaping our future with an extensive range of knowledge, experience, and
expertise to improve consumers’ lives today and into the future.

Performance & Rewards

P&G people are dedicated to making life better for people all over the world, so they deserve
benefits that help them live better lives, too. We want you to really understand how much you’re
valued, appreciated, and integral to the meaningful work that we do. From Day 1.

Use Your Time Your Way

Work/life balance is so important to P&G. After all, the business is about making life easier and
better—and we want that for you and your career just as much as our consumers and their day-
to-day lives. That’s why P&G offers flexible working times, remote working options, generous
paid vacation increasing with service, and personal leaves of absence. As well as being able to
make the most of life at home, one will also be able to contribute to P&G corporate-sponsored
volunteer events.

Receive Competitive Total Rewards

A person in P&G is valued for his work. P&G offers a market-competitive salary benchmarked
against the finest companies. The future salary increases will be reflective of the employee
contribution and impact on the business success. What's more, the financial package might
include things like interest-free loans, a tax-advantageous share purchase plan, a contributory
pension plan, and financial education on topics including purchasing your first home. Additional
perks include discounted P&G products from our company shops and a discount platform
offering you unbeatable savings on everything from groceries to exotic holidays.

11
Training programs

The leadership development programs applied by P&G are likely to benefit to both individuals
and organizations. First of all, ambitious individuals are more likely to take advantage of the
program to leverage their leadership skills in order to be prepared for the future managerial
positions. As for P&G, it can stimulate its employees to strive to accomplish acknowledged
performance. Besides, leadership leveraging programs will also help the enterprise to find
potential managers to sustain its future operations, who are considered as the invaluable assets
for success of P&G.

Culture
A foundation of integrity

P&G has a strong history of operating with integrity throughout the company—at all levels, in all
countries, both internally and externally. Our actions and the actions of all our employees are
governed by our Purpose, Values and Principles. The basis for every decision we make at P&G
can be found in our Purpose, Values and Principles—our PVPs. The clarity and constancy of the
Company’s PVPs is the one factor above all others that has driven the Company’s growth over
generations. Our commitment to operate responsibly is reflected in the steps we have in place to
ensure rigorous financial discipline and Corporate Governance.

Systems / Software

As the world’s largest consumer packaged goods company, Procter & Gamble Company (P&G)
sells most of its products for less than $10 each to more than 3.5 billion consumers. Firm control
of costs for compounds, containers, fragrances, adhesives, plastics, cardboard and other materials
is critical to P&G. The challenge was to reduce costs and increase efficiency in handling 1.2
million technical specifications for P&G brands around the world.

Procedure & Process

The following social practices and procedures are precisely considered while designing,
manufacturing, and finally delivering the products of P&G.

12
  At P&G, we believe that eliminating animal testing is the right thing to do.
 We're committed to ensuring that we don't source conflict minerals that fund armed
groups in the Conflict Region.
 We seek to uphold both the spirit and letter of the law and maintain high ethical standards
wherever we seek business. Our supplier sustainability guidelines outline the
expectations of our suppliers to ensure they uphold our high ethical standards in their
own operations and that of their partners.

Recognizing the rights of employees

Consistent with our purpose of providing branded products and services of superior quality and
value that improve the lives of the world’s consumers, now and for generations to come, we are
equally committed to improving the lives of our employees. At P&G, we strive to promote a
work environment of confidence and trust. An important part of our commitment to our
employees is our Employee Rights Policy which upholds our PVPs and respects International
Labour Standards. Our employees hold themselves and one another accountable for operating
with trust and integrity, for stepping up as leaders and owners of the business and for competing
honorably with a passion to win. P&G is committed to creating a work environment that fosters
open communication and supports employees in reporting potential violations. Retaliation of any
kind is inconsistent with our Values of Integrity and Trust and simply will not be tolerated.

Parental Leave Flexibility

In 2016, we announced improvements in our US parental leave benefits for mums and dads,
including up to a year off work during a child's first year through a combination of paid and
unpaid leave time. In 2017, we expanded benefits across the globe, adding enhanced maternity,
adoption and paternity leave benefits in more than 25 countries.

13
Flexible Work Conditions

P&G employees have the flexibility to work from home, and an increasing number of employees
are enjoying the benefits as and when they need to. This helps balance both business and
personal life.

Our Safety Heritage

Household consumer products provide a variety of benefits to society, such as cleaner homes and
improved health and personal hygiene, thus enabling an overall better quality of life. One
additional expectation of all consumer products is that they will be safe; that is, that their use will
not adversely affect human health or the environment. Throughout our history, P&G has
believed that the safety of our products is a prerequisite for responsible business. Our co-founder,
James Gamble, stated in the mid-1800s that "if you cannot make pure goods and full weight, go
to something else that is honest, even if it is breaking stone". Today, this philosophy is reflected
in our Statement of Purpose: "We will provide branded products and services of superior quality
and value that improve the lives of the world's consumers, now and for generations to come".
Safety is an intrinsic part of our products' quality and value.

Fulfilling our Commitments through advance researches

Our commitment to safety is reflected in the more than 700 in-house experts devoted globally to
ensuring the environmental and human safety of all our ingredients and products before they go
to market, as well as ensuring that they comply with laws and regulations in each of the markets
where they are sold. P&G also consistently promotes research that enhances understanding of
product safety. Our scientists have helped to develop numerous new methods and approaches to
advance the science necessary to evaluate safety. This is an ongoing process that requires us to
stay on the leading edge of new scientific knowledge in such diverse areas as analytical
chemistry, biostatistics, computer science and modelling, environmental science and
engineering, genomics, molecular biology, systems biology, and toxicology.

14
Animal Welfare Policy

At P&G, we’ve invested more than $410 million in developing alternative, non-animal testing
methods and then getting them accepted by regulators around the world. Today, we use more
than 50 non-animal alternatives, half of which were invented or co-invented by P&G. We will
continue working with the world’s top independent experts and partnering with leading animal
protection groups such as the Humane Society of the U.S. to promote new alternatives research
and regulatory acceptance of existing alternatives. This is the only way to eliminate all animal
testing, globally.

Learning

P&G emphasizes the idea that learning never stops. They create a culture of learning that’s
always happening in a variety of ways whether it’s through technical training or leadership and
soft skills training. There is a combination of learning methods which are employed from
multimedia learning to on-the-job experience. Learning is also very much framed as a reward
within the P&G culture, rather than something mundane or inflicted as a punishment. Often
time’s employees are offered new training and development programs when they reach a certain
milestone within the company or their career. Learning begins at the top. At P&G the culture of
learning certainly starts with organizational leaders and the leaders are not just held accountable
for the level of learning and development that occurs, but they’re actively involved in each step
of the process.

15