ENVIRONMENTAL ANALYSIS

Environmental Analysis



Environmental Analysis

Structural and organisational changes is a common aspect in any company may it be small, medium or large scale. An organisation undergoes change in order to ensure the products and services that will be given to consumers are excellent, as well as, the performance of the employees within the company. Change in an organisation can happen on the upper management, the employees, and products. Organisational Change, is the idea in which the organisation changes its system in a wider scale, as opposed to smaller transformations in the company such as adding a new person, or altering a program. Changes in the organisation are provoked by external forces of the organisation; usually an organisation undergoes organisational change in order to evolve to a higher level of entrepreneurial activity. Procter and Gamble is one of the companies that utilised change in organisation in order to become one of the most well-known product producers in the whole world. (Narisetti, 2007)

Culture Change

'Organization 2005 also aims at changing P&G's culture from a conservative, slow-moving, bureaucratic behemoth to that of a modern, fast-moving, Internet-savvy organisation. P&G wants to make faster and better decisions, cut red tape, wring costs out of systems and procedures, fuel innovation, set more aggressive sales goals and nearly double its revenue. The catalyst for all this change is IT.' (McLean, 2008)

In addition, P&G wants to abandon its legacy of secrecy. 'Its new spirit of openness is most evident on the Internet. A year ago, it was a stodgy, nondescript site where no one other than investors or job seekers had any reason to go to. Today, you see a consumer-friendly portal with loads of information about P&G products.' (McLean, 2008)

So far, Organization 2005 has had little to show. However, P&G stresses the company will pick the fruits of the ambitious restructuring plan in the near future. "This restructuring," former CEO Millen explained, "will ensure that P&G is well placed to address the issues facing manufacturers, retailers and wholesalers at the outset of the 21st century. Examples of these issues are the internationalisation and consolidation of retailing, consumer loyalty and retention, category management, the potential effects of the Euro currency and dramatic advances in information technology." (Narisetti, 2007)

External Environmental Analysis

In the external environment of Procter and Gamble there are two areas that needs to be analysed and these are the General Environment and the Competitive Environment.

General Environment- one of the aspects of the general environment that would have a huge effect on the business of Proctor and Gamble is the political and legal conditions of the country in which the company has established an office and factory. The legal conditions include the policies of the government towards business, the regulation of the business and labour, and the budget plans and conditions. The political stability and the legal conditions of the government in which Procter and Gamble have established their business plays an important role in the change in the organisation. If the legal and political condition is not good, ...