Week 01 Assignment 01: Application Assignment, CMGT 500

 Alexandra Waterworth

CMGT 500

The power of Innovation can sometimes make or break a company. For The Industry giant Proctor & Gamble, the company’s decline in “cutting edge” products may be the beginning of their demise.  In the Bloomberg Business Week article entitled, “At Procter & Gamble, the Innovation Well Runs Dry,” not only did I see a perfect correlation between our readings and what is happening to the corporate giant, but the article basically stated that because Proctor & Gamble has not produced a “blockbuster” item such as Crest white strips or the Swifter in a decade.

            One of the strongest reasons that Proctor & Gamble is “in trouble” is that the company feels the need to please their new share holders: “McDonald [CEO] is under pressure from activist investor William Ackman, who in July took a $1.8 billion stake in P&G and may seek management changes. Blockbusters have “dried up a bit,” acknowledges Bruce Brown, P&G’s chief technology officer. “We want to get back to more of that.”” (Lochner and Hymowitz p.1 ). This citation directly relates to our reading “The Images of Organization”: “They [management] are aware that new insights often arise as they approach situations from new angles and that a wide and varied reading can create a wide and varied range of possibilities for action.” (Morgan, 1998, p. 4). This connection between variations in management decisions and the possibility for growth is important to realize if one is in an upper management position; one must be “flexible” and create possibility for action. In upper management, the audience is not limited to the employees below them, but shareholders who have invested capital in the company.  

 

As the CEO, who could be seen as the highest “manager” in the company, it is clear that a CEO/manager must be conscious of all operations in the company. Henry Fayol explains the role of the manager very astutely, “For Fayol, management involved all the activities associated with producing, distributing, and selling a product. A manager needed to be able to formulate plans, organize plant and equipment, deal with people, and much more.”(Wren and Bedeian, 2009)  This statement reinforces the notion that the manager should be involved in all parts of the business process, including formulating plans (i.e. formulating and innovating new products). However, McDonald is neglecting this policy, according to his shareholders.

 

One of the biggest correlations that I drew from comparing the Business Week article to the assigned readings was that, the article examines Proctor & Gamble’s innovation issues from an executive perspective. The article discusses what the executives and shareholders will do to try to innovate; this is very similar to Fayol’s philosophy; “Fayol's orientation was that of an upper-level administrator. He believed that “the responsibility of general management is to conduct the enterprise toward its objective by making optimum use of available resources. It is the executive authority that draws upon the plan of action, selects personnel, determines performance, and ensures and controls the execution of all activities.”(Wren and Bedeian, 2009, p. 227) This is very different from the general tenants of Frederick Taylor’s philosophy, especially on Taylors philosophy of “functional foreman.”Functional Foreman are “each in charge of a different responsibility (i.e. function)”. (Wren and Bedeian, 2009, p. 131).

 

 It is clear that the underlying principal that they can agree upon is that innovation within the company is key to a company’s success. Fayol believes that management should be apart of all operation of the organization including the innovation; Whereas, Taylor believes that each manager should have a specialized role, and that innovation comes from the employees hard work. In either cases, the execution is different but the common goal could be viewed as the same. For Proctor and Gamble the recent innovation has come from acquiring outside products and companys, not within their management or their own products. “… the company over the years has acquired big brands, including the Olay and SK-II skin care lines and Gillette. Yet homegrown products remain the challenge.” (Lochner and Hymowitz p.2). It is obvious that the viability of the company relies on internal change.

Lauren Coleman-Lochner,. & Carol Hymowitz. (September 6, 2012). At Procter &   Gamble, the Innovation Well Runs Dry. Bloomerg Businessweek,. Retrieved from
http://www.businessweek.com/articles/2012-09-06/at-procter-and-gamble-the-innovation-well-runs-dry#p2

 

 

Gareth, Morgan. (1998). The Promises of Images of Organization. The Images of Organization, The Executive Edition, p. 3-13.

 

 

 

Wren, Daniel. A,. & Bedeian, Aurthur. G. (2009). The Emergence of the Management Process and Organization Theory. The Evolution of Management Thought, 6, p.122-155 and 211-234