Leadership styles at Procter & Gamble and Colgate-Palmolive

¶ … Management Project

Jennessa Clark

Indiana Tech

2 Brief History and Organization Background

2 Proctor & Gamble History

4 Colgate-Palmolive

5 Situation Analysis

5 External Environment

5 Internal Sociotechnical Systems

6 Problem Diagnosis & Definition

7 Great Man Theory

7 Trait Theory

8 the Managerial Grid

8 theory X and Theory Y

9 Participative Leadership (Lewin's leadership styles)

9 Situational Leadership

9 Contingency Theory

10 Transactional Leadership

10 Transformational Leadership

10 Organizational Leadership Discussion

14 Practitioner Recommendations

15 Overall Research Approach

16 Site and Population Selection

24 Identifications and Evaluation of Alternative Interventions

25 Action Planning

26 Follow-up and Evaluation

28 Work Cited

An Analysis of Leadership Styles Utilized by Procter & Gamble and Colgate-Palmolive and their Role in Contributing to Effective Practices and Profitability

Introduction

This research proposal will focus on two major competitors in the national and international market, Procter & Gamble and Colgate-Palmolive, and the types of leadership that can be found within those organizations. The first step will to compile a list of leadership models that would most likely to be found within these organizations and then develop a questionnaire or interview process to see which models would fit best in the organizations. By identifying the leadership styles that are used in the organizations, it could be useful to the organization to understand leadership models and adapt or improve the current styles of leadership that are used in the business

Brief History and Organization Background

Proctor & Gamble History

Procter & Gamble was established in Cincinnati, OH in 1837 by brothers-in-law William Procter, a candle maker and James Gamble, a soap maker, continuing to this day under the name of Procter & Gamble (Procter & Gamble, 2015). It began as a two-man partnership but by 1859, the partnership had 80 employees and annual sales exceeding $1 million, and then steadily grew through research, innovations and army contracts. In 1890, the partnership ended as Procter & Gamble incorporated to raise additional funds for expansion. In 1900, the corporation begins international sales in England and parts of Asia. In 1915, the corporation began manufacturing outside the United States, in Hamilton, Canada. In 1920, the company began using direct sales, with 450 salesmen selling directly to retailers. In 1930, the first non-family member, Richard R. Deupree, is chosen as company president, and the corporation establishes it first overseas subsidiary by purchasing Thomas Hedley & Co. Ltd. Commencing in 1935, the company expands into Asia by: the 1935 acquisition of the Philippine Manufacturing Company; the 1959 expansion into the Middle East; and the 1973 acquisition of Japan's Nippon Sunhome Company.

In the 1940s and 1950s, the company expands into South America by building or acquiring manufacturing in Cuba, Mexico and Venezuela. In 1954, the company expands manufacturing into France. The company continues its acquisitions, including but not limited to Charmin Paper Mills in 1957 and Norwich Eaton Pharmaceuticals in 1982. The company also continues its geographic expansion, most notably expanding into Eastern Europe through its acquisition of a detergent manufacturer in Czechoslovakia in 1991, obtaining a hiring license in Saudi Arabia and opening Chinese operations in Guangzhou, Beijing, Shanghai, Chengdu, Tianjin, Dongguan and Nanping by 2013. Today, P&G's manufacturing and marketing is represented by approximately 145 nationalities and its stock is traded on the New York Stock Exchange as PG at $82.89 per share (Yahoo!Finance, 2016). Its corporate board of directors has general oversight per Ohio's General Corporation Law, P&G's Amended Articles of Incorporation and Code of Regulations, and the Board of Directors' By-Laws (Procter & Gamble, 2015

Colgate-Palmolive

William Colgate & Company was founded in New York City in 1806 by William Colgate as a candle, soap and starch factory, reorganized in 1875 as Colgate & Company. In 1898, B. J. Johnson Company developed the formula for soap made of palm oil and olive oil, called "Palmolive," which became so famous that the company was renamed Palmolive, and then merged with the Missouri-based soap manufacturing Peet Brothers Company. Palmolive-Peet acquired Colgate Company in 1928, eliminated "Peet" from its name in 1958 and became the current Colgate-Palmolive Company (Colgate-Palmolive Company, 2016). In 1930, the company was first listed on the New York Stock Exchange.

Before and after its incorporation, the company has expanded through multiple product developments, acquisitions and international subsidiaries, including: Colgate toothpaste and Palmolive soap, predating incorporation; acquisition of Hill's Prescription Diet, Hoyt Laboratories, Softsoap, Murphy Oil Soap, Tom's of Maine and the Mennen Company; development of Ajax cleanser, Irish Spring soap, Protex bar soap, Colgate Plus toothbrush and Colgate Total; acquisition of a French subsidiary for fabric conditioner, a Mexican subsidiary for Caprice hair care, a Chinese joint venture with Hawley & Hazel and expansion into Central Europe and Russia. Today, Colgate-Palmolive concentrates on oral care, personal care, home care and pet nutrition, selling products in 200 countries with annual sales of more than $15 billion (Colgate-Palmolive Company, 2016). The corporation is currently traded on the New York Stock Exchange as CL at $69.91 per share (Yahoo!Finance, 2016). The company's corporate governance is headed by a Board of Directors, with general oversight per New York's General Corporation Law, the company's Amended Articles of Incorporation and Code of Regulations, and the Board of Directors' By-Laws (Colgate-Palmolive Company, 2016).

Situation Analysis

External Environment

As international major players in the Personal Products Industry, Consumer Products Sector, both companies deal with strong competition from Avon, Estee Lauder, Revlon, Coty, Elizabeth Arden, Inter-Parfums, Inc., Unilever, Bic, Church and Dwight Co., as well as many smaller companies (Investopedia, n.d.). External stressors other than competition include multinational laws, taxation, cultures and political systems.

Internal Sociotechnical Systems

The internal sociotechnical systems model considers the relationship of employees and technical systems on the basis of the dynamics between factors such as:

a. Managerial

b. Structural Subsystem

c. Psychosocial and other Critical interfaces.

Problem Diagnosis & Definition

Overview

Leadership is a complex concept and there are a variety of different models that have been developed to try to understand the different styles that can be used. Procter & Gamble and Colgate-Palmolive Company are two competitors that operate in the consumer goods industry. These two companies compete for a huge customer base, which is divided into different segments including hair, personal and beauty care. Colgate-Palmolive Company is one of Procter & Gamble's main competitors in the baby, feminine and family care segment. Since their inception, Procter & Gamble and Colgate-Palmolive have developed to become the two largest household products firms across the globe with increased dividends for more than five decades (Seeking Alpha, 2014). While effective business practices and operations have played a crucial role in the success and increased profitability of these companies, the leadership styles adopted by their management have made the difference.

Research Objectives

This research effort will focus on objectives related to indentifying the leadership style that is used in a paticular organization by interviewing several members from within the organization who serve different roles. The researhc will use different sources and determine whether they are in agreement about the perception of the leadership styles that are present in the organization.

Literature Review

Leadership is one of the most fundamental aspects to running a successful organization and can be considered arguably the largest critical success factor. The literature chosen will assist with the research proposal which will focus on two major competitors in the national and international market, Procter & Gamble and Colgate-Palmolive, and the types of leadership that can be found within those organizations. Leadership is a complex concept and there are a variety of different models that have been developed to try to understand the different styles that can be used.

Over time, a number of theories of leadership have been proposed, including: Great Man Theory; Trait Theory; Behavioral Theories, such as the Managerial Grid, Theory X and Theory Y; Participative Leadership, particularly Lewin's leadership styles; Situational Leadership; and Transformational Leadership (IAAP, 2009). Additional models that are popular in literature include leadership models such transactional leadership, behavioral theory, competencies theory, network theory of leadership and many more

(Turner & Muller, 2005). A brief review of each theory follows.

Great Man Theory

The Great Man Theory is a concept that leaders are born rather than made and that great leaders have traits that other people lack. These leaders "rise to the occasion" in difficult times to overcome difficulties and successfully lead (Web Finance, Inc., 2016). The study of leadership was largely focused on stories of heroic leaders that dominated the discourse before the advent of the leadership theory (Jemsek, 2008).

Trait Theory

The Trait Theory measures consistency in a leader's behaviors, thoughts and emotions. The stability of his/her patterns over a period of time, their differences from those of other people and the way they influence behavior are all studied to reveal leaders and how their leadership works (Web Finance, Inc., 2016). The definition has also been stated as that leaders exercise influence, taking actions that, in one way or another, shape the behavior of people (Mumford, Zaccaro, Harding, Jacobs, & Fleishman, 2000).

The Managerial Grid

A managerial grid is a tool used to plot a leader's appraisal of a task's importance vs. employees' importance. If the employees' importance ranks higher, the leader is more of a team leader, while a higher task ranking may mean the leader is too dictatorial for the "team" concept (Web Finance, Inc., 2016).

Theory X and Theory Y

Theory X and Theory Y are collections of assumptions leaders have about their employees that often become self-fulfilling prophecies. Theory X assumptions are:

1) Most people dislike work and will avoid it as much as possible;

2) Due to their dislike and avoidance of work, people must be pressured, controlled and threatened with penalties to accomplish work; and

3) People choose security, avoid responsibility and have little or no ambition.

Leaders with Theory X assumptions tend to use a restrictive, controlling stick-and-carrot approach toward employees (Web Finance, Inc., 2016).

Theory Y assumptions are:

1) Most people find physical and intellectual effort natural and find fulfillment in work, depending on the environment;

2) People are normally motivated, self-controlled, self-directed, creative and resourceful in working to fulfill their and the company's goals;

3) People either pursue or accept responsibility freely; and

4) Most organizations fail to use people's full potential.

Leaders with Theory Y assumptions trust and empower their employees (Web Finance, Inc., 2016)

Participative Leadership (Lewin's leadership styles)

Participative leadership maintains control over final decisions but involves employees in setting goals, solving problems, and building teams (Web Finance, Inc., 2016

Situational Leadership

Situational leadership maintains that an effective leader must be flexible, knowing and using different leadership styles subject to the situation (Web Finance, Inc., 2016). The rise of the "situational" approach focusing on the relationship between a specific circumstance and leadership is a result of diverse and often conflicting demands on the manager and the underlying question is whether a manager is capable of altering his/her leadership style to match the shifting environment as the project progresses through its life cycle (Lee-Kelley, 2002).

Contingency Theory

The Contingency Theory holds that there is no master theory applicable to all businesses in all situations. In this approach, leaders address problems by determining the relevant issues and then addressing them based on their context and the business environment (Web Finance, Inc., 2016). Contingency theory concludes that there is not a single best way to manage processes of organising, decision-making and leadership since different environments provide different antecedents (Volker, Blome, & Schleper, 2013).

Transactional Leadership

Transactional Leadership sets clear objectives and goals and uses punishment or reward to obtain employees' compliance with those objectives and goals (Web Finance, Inc., 2016). Bass (1985) defined transactional leadership is aimed at monitoring, controlling, and motivating employees through economic incentives and other exchange incentives (Bass, 1985).

Transformational Leadership

Transformational leaders are able to influence their subordinates to reach their full potential by setting challenging expectations will in many cases leads the employees to achieve higher performances (Bass, 1999).

Practitioner Recommendations

The immediate temptation when faced with all the above leadership styles would be to simply choose one that seems likely, formulate a questionnaire based on that likelihood and use the questionnaire on Procter & Gamble and Colgate-Palmolive management and employees. However, attempting to fit either or both organizations into a predetermined theory could skew the results and lead to false conclusions. Consequently, reviewing practitioner recommendations, one should reduce all the theories to a series of innocuous questions that will reveal the true leadership style(s) used in either or both organizations. There are numerous management leadership survey templates online to begin formulating an effective questionnaire; one very useful source is the "Survey Monkey" web site, which provides templates for employees, managers and human resources (SurveyMonkey, 2016).

Related Research on Similar Topics

In the course of researching this topic, many related searches and similar topics were encountered. The following related and similar topics were encountered: An analysis of social, technological, economic, political and governmental forces facing international businesses in today's global market (Conklin, 2011). Also, exploration of basic traits of leadership and of specific theories: Situational Leadership; Contingency Theory; Transactional Leadership; Transformational Leadership (IAAP, 2009).

Methodology

The primary research method will consist of a short questionnaire that was designed to identify different types of leadership that are present in the organization. The questionnaire will be given to as many members of the organization as possible and the questionnaires will be collected and the data will be compiled and analyzed. In addition to use of the internet as well as books and journal articles. The research should be able to be conducted with the assistance of a spreadsheet like MS Excel to code the data and make the statistical calculations.

1. What does leadership and progress mean to employees at these companies and are they different form other companies?

2. Which models of leadership best fit the leadership profiles that are present with in the organizations?

2.

How has gender and diversity affect the leadership profiles in these companies?

3.

How can the lessons learned from the above questions be translated into action that will result in leadership development and grooming of future leaders?

Overall Research Approach

The researcher seeks to conduct the study by starting with examination of the various leadership styles by focusing on surveys that identify existing leadership theories and approaches. During this analysis process, the researcher will examine leader-member exchanges through asking leaders and followers' questions to determine leadership styles used in Procter & Gamble and Colgate-Palmolive. The researcher will use questionnaire research method because of its suitability in gathering and tabulating huge amounts of data is relatively cheaper ways. The use of questionnaire method for this study is because the nature of the research question requires information from several different managers in both companies.

Apart from the questionnaire method, the researcher also seeks to conduct interviews and make observations to help collect additional information on the research issue. Interviews will help in gaining comprehensive and more detailed information relating to the research question while observation will help in ensuring more consistent interpretation of collected data. In order to use this research approach effectively, the researcher will develop survey questions, which will be utilized in the interviews and surveys on leaders and managers of Procter & Gamble and Colgate-Palmolive.

Site and Population Selection

To conduct this study, the researcher will carry out the survey on participants at Procter & Gamble and Colgate-Palmolive. A suitable representative sample of leaders and followers from both companies will be selected. The surveys will be conducted at both companies to ensure that the study does not interfere with the normal operations of the companies. The participants for this study will be selected randomly to help enhance the credibility and accuracy of the findings.

The number of participants for this research will be considerably high so that accurate determinations will be made regarding leadership styles at Procter & Gamble and Colgate-Palmolive. Once participants are selected randomly, leader-member pairs will be self-selected after having been randomized. After determining the leader-member pair, they will be surveyed to determine leadership styles utilized by both companies' management.

Findings and Discussion

What does leadership and progress mean to employees? The companies' workers at Procter & Gamble Distributing Company and Hill's Pet Nutrition an affiliate of Colgate-Palmolive were surveyed to give their opinions. The survey was sent to 87 workers at both organizations, and there were 32 responses. The survey focused on two main components, all of which were open-ended in nature. This section will cover the responses to the questions that were asked. Below is an example of the survey that was given.

The first research component questions were about age grouping, gender, and last previous work experience of the employees taking part in the survey. In the age group category zero participants were under the age of 25, nine participants between the ages of 26-40, thirteen participants between the ages of 41-55, eight participants between the ages of 56-59, and four participants between the ages 60 and above. Twenty-three participants were Female and nine participants were Male. All participants had Previous Work Experience.

Part A Place a mark on the line that best relates to you.

1. Age Group:

___ Under 25

___ 26 to 40

___ 41 to 55

___ 56 to 59

___ 60 and above

2. Gender:

___ Female

___ Male

3. Previous Work Experience:

___ Yes

___ No

The second research component questions were about leadership styles and approaches in your current workplace. With the question of the type of leadership style I have or seen my supervisor use choices were: Autocratic, Charismatic, Coaching, Laissez-faire, Participative, and Situational. The participants did not choose the leadership styles of Autocratic, Charismatic and Participative. Eleven of the participants chosen the leadership style of Coaching. Seventeen of the participants chosen the leadership style of Laissez-faire. Four of the participants chosen the leadership style of Situational leadership.

Part B

Please provide your view about leadership styles and approaches in your current workplace by placing a mark on the statement that best descibes your view.

4. Check the type of leadership style I have or have seen my supervisor use.

___ Autocratic (maintains control over all decisions - micromanages)

___ Charismatic (gathers followers through the use of their personality and charm)

___ Coaching (helps volunteers identify both weaknesses & strengths through feedback)

___Laissez-faire (has a hands-off approach, trusts volunteers to direct their own activities)

___ Participative (inspires & manages but lets the group shape decision)

___ Situational (uses different styles depending on the volunteer and the task)

The next question pertaining to leadership styles asks does the leader provide necessary support and guidance to help accomplish desired organizational goals across work practices. Participants did not choose Strongly Disagree and Does Not Apply. One participant chosen Disagree. One participant chosen Somewhat Disagree. Three participants chosen Somewhat Agree. Nineteen participants chosen Agree. Eight participants chosen Strongly Agree.

5. I/my leader provide necessary support and guidance to help accomplish desired organizational goals across work practices.

Does

Strongly

Somewhat

Somewhat

Strongly

Not Disagree

Disagree

Disagree

Agree

Agree

Agree

Apply

1

2

3

4

5

6

6. I feel there is a positive climate of teamwork in the organization's workplace.

The question of asking participants the feeling of positive climate of teamwork in the workplace, participants did not choose Strongly Disagree, Disagree, Somewhat Disagree, and Does Not Apply. Fourteen participants chosen Somewhat Agree. Twelve participants chosen Agree. Six participants chosen Strongly Agree.

Does

Strongly

Somewhat

Somewhat

Strongly

Not Disagree

Disagree

Disagree

Agree

Agree

Agree

Apply

1

2

3

4

5

6

Asking the participants if they feel the organization has created an environment for every individual to develop and contribute to organizational success. Participants did not choose Strongly Disagree and Does Not Apply. One participant chosen Disagree. Six chosen Somewhat Disagree. Sixteen chosen Somewhat Agree. Eight chosen Agree. One chosen Strongly Agree.

7. I feel that the organization has created an environment for every individual to develop and contribute to organizational success.

Does

Strongly

Somewhat

Somewhat

Strongly

Not Disagree

Disagree

Disagree

Agree

Agree

Agree

Apply

1

2

3

4

5

6

Next, the question asked was if the company is usually receptive to ideas or suggestions from everyone regardless of their job position or status. Participants did not choose Strongly Agree and Does Not Apply. Four participants chosen Strongly Disagree. Four participants chosen Disagree. Four participants chosen Somewhat Disagree. Six participants chosen Somewhat Agree. Fourteen participants chosen Agree.

8. The company is usually receptive to ideas or suggestions from everyone regardless of their job position or status.

Does

Strongly

Somewhat

Somewhat

Strongly

Not Disagree

Disagree

Disagree

Agree

Agree

Agree

Apply

1

2

3

4

5

6

Asking the participants the question does the company usually recognizes an employee's contribution to the organizational goals and success. Participants did not choose Strongly Disagree, Strongly Agree, and Does Not Apply. Two participants chosen Disagree. One participant chosen Somewhat Disagree. Twenty-three participants chosen Somewhat Agree. Six participants chosen Agree.

9. The company usually recognizes an employee's contribution to organizational goals and success.

Does

Strongly

Somewhat

Somewhat

Strongly

Not Disagree

Disagree

Disagree

Agree

Agree

Agree

Apply

1

2

3

4

5

6

Last question asked by the participants was if they would like the organization's management to change the current leadership style. Participants did not choose Strongly Disagree, Disagree, and Does Not Apply. One participant chosen Somewhat Disagree. Four participants chosen Somewhat Agree. Twenty participants chosen Agree. Twelve participants Strongly Agree.

10. I would like the organization's management to change the current leadership style.

Does

Strongly

Somewhat

Somewhat

Strongly

Not Disagree

Disagree

Disagree

Agree

Agree

Agree

Apply

1

2

3

4

5

6

The study did not include any data from other companies, so no direct comparison of results could be made. Studies on the importance of leadership tend to focus on specific roles that leadership plays, such as leading through merger & acquisition activity (Sitkin & Pablo, 2005) or in shaping business values (Ciulla, 1999). This means that there is no way to determine whether leadership is more important at these two companies than any other company. There is no intuitive reason why it should be, but the research design did not even test this hypothesis.

Moreover, that the responses were overwhelming positive does not indicate much that can be learned, nothing actionable. If leadership is important, but it is always important, that certainly means that steps can be taken to improve the quality of leadership at a company, but what sort of improvements would require a deeper understanding of leadership than was identified in the subsequent research questions.

There was no real support for any one leadership type. There were some responses, but they offered a mix of types. Some would have studied leadership, but others may have come from different backgrounds and not have had the benefit of formal leadership studies. The supplemental materials were clearly insufficient to generate a stronger response from the respondents. An additional issue here is that judgments were being asked of the participants to compare the current state of the company with an unspecified time in the past when maybe there was less diversity in leadership. Insufficient clarity in the questions leads to insufficient responses.

There was no single response that can be said to have appeared in a statistically significant number of responses. The researcher might have been better to interpret this from a different set of questions. Vaguely, the only real conclusion is that there should be leadership training at these companies, and that leaders should be chosen on merit rather than tenure.

Identifications and Evaluation of Alternative Interventions

There are several potential interventions to improve the quality of leadership. First, given the lack of knowledge of leadership theory in these companies, education on leadership theory is one potential intervention. By understanding how different leaders influence the organization, the people who are in leadership positions can move from their present ad hoc leadership styles to styles that are more coherent and easier to define. Knowing the strengths and weaknesses that one has as a leader, and applying them to establish leadership theory is a pathway to improving one's leadership.

Another recommended intervention is a mentorship program. There are two ways that a mentorship program can serve the company. The first is that mentorship improves the quality of future leaders, as they learn more, and from a younger age, than their predecessors who did not have access to mentorship. Additionally, mentorship can provide pathways into leadership for talented people who might otherwise be overlooked for their lack of experience. Mentorship has been identified as a pathway in particular for women and minorities to enter leadership ranks, which again increase diversity among the leaders at the company. Mentorship also provides a means for senior leaders to give something back to the company, and the knowledge transfer to other leaders can be incredibly valuable.

The third recommendation is a proposed intervention for the managers in this company that Human Resources should have a plan for putting certain kinds of leaders into certain roles. The survey respondents indicated that there are different leadership styles within the company, that some units are heavy on transactional work while others rely more on innovation for their success. These function therefore require substantially different leadership styles. If the Human Resources department can understand which of these leadership styles is best for which department, then it can ensure that the right leader is in the right role for the company.

Action Planning

As a quick review, the interventions proposed were the performance management model, talent and career intervention, work diversity dimension interventions and stress management diagnosis intervention. Of those four, this section will focus on the first and the last.

Performance management is something that should be an integral part of any human resources approach. Performance should get a formal review at least once a year and feedback of some nature should be ongoing so that it is known by the employees that they are being monitored and they will know what they are doing right and wrong. However, the challenge in doing this is measuring people completely and accurately. This can be done through measuring metrics like turnaround time on assignments, whether customers were addressed the right way, whether the person was on time for work and things like that. Using objective and unquestionable metrics should be paramount as subjectivity should be avoided at all costs.

Stress management is the other thing to watch out for and this would include people getting irritable, burned out and so forth. These employees perform at a lesser level and make more mistakes. There needs to be a good work/life balance for all employees so that they remain refreshed.

The confluence of the two methods above should yield great results as people are not suffering in their results due to being worked too hard and too much and the performance that does exist can be watched over in a way that is fair, equitable and consistent across the board. Indeed, having employees that are fresh, know what they do well and know what they need to work on will contribute more than those that are missing one or more of those.

Follow-up and Evaluation

There is the need to be continuous and objective when it comes to monitoring and reviewing what is going on with employees and their performance. There is also the need to relieve stress and keep burnout at bay. One major way to measure whether there is a major work/life balance and a way that is very objective is to make sure that people are using their vacation. If someone is capped out on their vacation and/or they are losing out on getting more vacation because they never take time off, which is a bad sign. If a person is not able to take time off because they are deemed to be too critical to not have around, that condition needs to be fixed. There should be a backup for everyone on the job so that there is not the need to limit or preclude someone from taking time off.

As for measuring job performance, either during review time or ongoing from day-to-day, it has to be objectively defined and established what the minimum level of performance and compliance is and why that level is required. For example, if it is fair and reasonable for everyone on staff to make one hundred widgets, then this should be the standard. However, if one or more people are missing that standard, it needs to be figured out why. It could be a problem with one person or it could be a breakdown in policy or procedure. For anyone or any situation where a standard is not being met, it needs to be figured out why. If it is an issue with the person, the issue should be addressed. If there is a problem with the policy or procedure, then that is what needs to be addressed. Basically, no perceived or actual issue with a person or a policy should be reacted upon unless it is fully and completely known what the real problem happens to be. Only then can proper performance management be executed as the real and definite problem is always being addressed and everyone is treated fairly.

Work Cited