1. Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
P&G
1. P&G started in Cincinnati as a candle and soap
making company in 1830’s.
2. Now a Multinational company present in all over 180
countries.
3. 9th largest company in the world with over $80billion
in sales.
4. It also operates and maintain more than a hundred
manufacturing plants across the globe.
2. Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
P&G manufacture and distribute products in ten core
categories: Baby Care, Feminine Care, Family Care,
Grooming, Oral Care, Personal Health Care, Hair Care,
Skin and Personal Care, Fabric Care and Home Care.
And, within each category, Research & Development,
Product Supply, and the Brand organization develop,
manufacture and market the brands and products they
provide to consumers.
3. UNIE
In 1872, two Dutchmen, Jurgens and Van Der Bergh
had ventured into the margarine business
In 1927, they decided to merge to form two
companies, Margarine Unie NV, based in the
Netherlands and Margarine Union Ltd, based in the UK
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
4. LEVER
William Hesketh Lever founded ‘Lever Brothers’ in 1885
By 1887, introduced ‘SUNLIGHT’, the world’s 1st packaged laundry
soap
Lever & Co. was making 450 tons of Sunlight soap a week
He expanded his business from UK to Australia, North America
and other parts of Europe
In 1890, Lever & Co became a limited company –LEVER
BROTHERS LTD, by 1894, they went PUBLIC
Diversified into other businesses, acquired Pears soap and Wall’s
Launched its innovative product , VIM
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
8. Roadmap to P&G’s restructuring
1987: Matrix Structure
• 39 US product category
Bus were created run by
General Managers
1995: Global
Matrix Structure
• Extended to rest
of the world
• 4 regional
presidents were
reporting directly
to CEO
2005: Global
Business Unit
Structure
• Annual sales
grew 40% since
2000 and stock
price nearly
doubled
2013: Hybrid
Structure
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
9. Matrix and Global Matrix Structure- 1987 to 1999
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
10. In 1998, P&G started a 6 years restructuring program – “Organization 2005”
Voluntary separations of 15,000 employees by 2001
45% job suppressions from global product - supply consolidation
Elimination of six management layers reducing the total from 13 to 7
Dismantling matrix organization structure and replacing with interdependent
organizations : GBUs, MDOs, GBS and Lean Corporate Functions.
GBUs will help to get a total feel of the local market by giving local managers
power and will make P&G locally responsive.
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
11. Analysis of Organization 2005
One of its major objectives was to significantly improve all inefficient work
processes of P&G including its product development, SCM and marketing
functions
Focus was more on rolling out new products at a faster rate
Previously, the organization was more centralized coupled with separations
and negative growth rate which had weakened the morale of employees
Jager decided that P&G would sell its products under the same name around
the world
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
17. 1930-1979
• Strategy : Independent units at various location
• Features : Matrix organizational structure
1980-1995
• Strategy : Focused growth
• Features : Concentration on 4 industries, 100 acquisition, 38 companies acquired in 1995
1996-1999
• Strategy :Breakthrough Sustainability Strategy
• Features :Focus on core competencies, Operations were grouped by product combination of
“Global Push & Local Pull"
1999-2004
• Strategy : Path to Grow Strategy
• Features : Brand portfolio of 1600 became 400 for better focus. 150 units closed down for cost
control, 55000 employees retrenched
2005-2015
• Strategy : Growth to vitality Strategy
• Features :High concentration on Emerging markets. Company simplified its management structure, 20000 job
cuts in Europe. Target: 3 - 5 % Organic growth.
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
18. Current Objectives of Unilever
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
• Become lean and mean(Retrenchment).
•Focus on sales maximizing products.
•Reduce number of SKUs.
•Improve working capital management.
•Maximize margins by minimizing costs.
• Expediting DM process by changing operations
• Want incremental change by increasing sales in tier
2 &3 cities.
19. Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
• UNILEVER being a multiproduct organisation, enjoys autonomy to
manage the products on their own through SBUs.
• VISIBILITY being their core strategy, always adopted the front bench
strategy in any retail store.
• Achieving price efficiency- by rationalising the middle level managerial
talents.
• increase from 3 to 7 marketing headquarters.
