Professional Documents
Culture Documents
A CSR Perspective
-by Sarang Tilak,
PGDBM, SIMSREE
Roll No: 857
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INDEX
Topic
no.
1.
Topic
Page
no.
3
3.
4.
SOCIAL aspect
11
5.
In A Nutshell
21
2.
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MISSION:
To 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.
VALUES:
P&G is its people and the values by which we live.
We attract and recruit the finest people in the world. We build our
organization from within, promoting and rewarding people without regard
to any difference unrelated to performance. We act on the conviction that
the men and women of Procter & Gamble will always be our most
important asset.
LEADERSHIP:
We have a clear vision of where we are going.
We all act like owners, treating the Company's assets as our own
and behaving with
the Company's long-term success in mind.
INTEGRITY
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ECONOMICAL
Effective from July 1, 2007, the company's operations are
categorized into 3 "Global Business Units" with each Global Business Unit
divided into "Business Segments," according to the company's June 2007
earnings release.
1. Beauty Care
Beauty segment
Grooming segment
2. Household Care
Health Care
Snacks, Coffee and Pet Care
23 of P&G's brands have more than a billion dollars in net annual sales
and another 18 have sales between $500 million and $1 billion.
Manufacturing
Procter & Gamble manufactures its products across the globe.
Manufacturing operations are based in the following geographies
*
*
*
*
*
*
US
Canada
Latin America
Europe
China (31 wholly-owned factories) and other parts of Asia
Africa
Productions
Procter & Gamble produced and sponsored the first radio opera soap
operas in the 1930s (Procter and Gamble's being known for detergents
(soaps) was probably the genesis of the term "soap opera"). When the
medium switched to television in the 1950s and 1960s, most of the new
serials were sponsored and produced by the company. Two of their serials,
As the World Turns and Guiding Light, are still on the air today and are
produced by TeleNext Media, Inc for Procter & Gamble. The serial The
Young and the Restless also is regularly sponsored by products from
Procter & Gamble, as well as other daytime serials.
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ENVIRONMENTAL
Environmental Quality Policy
Procter & Gamble is committed to providing products and services
of superior quality and value that improve the lives of the world's
consumers. As part of this, Procter & Gamble continually strives to
improve the environmental quality of our products, packaging and
operations around the world. To carry out this commitment, it is Procter &
Gamble's policy to:
Ensure our products, packaging and operations are safe for our
employees,
consumers and the environment.
Ensure every employee understands and is responsible and
accountable for incorporating environmental considerations in daily
business activities. We encourage, recognize and reward individual and
team leadership efforts to improve environmental
quality.
We
also
encourage employees to reflect their commitment to environmental
quality outside of work.
The company also said it will reduce CO2 emissions, energy and water
consumption, and disposed waste per unit of production by an additional
10 percent each, contributing to a 40 percent reduction over the decade
(2002-2012).
Other goals include:
Improve the lives of 250 million children through its corporate cause,
Live Learn and Thrive. It will also deliver another two billion liters of clean
water through its Childrens Safe Drinking Water program over the next
five years. The company estimates that this will prevent 80 million days of
disease and save 10,000 lives.
Help P&G employees build ?sustainability thinking and practices into
their daily work.
Continue to work with external stakeholders, such as the Centers for
Disease Control, UNICEF, the World Health Organization and Populations
Services International, to create new opportunities and solutions for the
worlds sustainability challenges.
P&G is a founding member of the recently announced Supply Chain
Leadership Coalition, an organization that will press suppliers to release
data about carbon emissions and climate-change strategies.
Environmental
Credentials
P&G
has
been
leading
the
industry
with
innovations
like
In 1992, P&G received the World Environment Center Gold Medal for
International Corporate Environmental Achievement.
SOCIAL
CSR
There are various CSR activities carried out by P&G with genuine intention
of giving back to the society. A few highlighted have been discussed within
this project.
They are:
delivered by UNICEF where it was most needed. This initiative was run in
Spain and Portugal, then twice in the UK, and in total delivered some 11
million TB vaccines, while building P&Gs business. These product and
business model innovations can significantly improve lives, and help build
business. This is not business as usual and it is not philanthropy; it is
building social, environmental and economic sustainability into business in
a strategic way. Developing new products and new business models for
developing markets present significant challenges, however, and not all
initiatives succeed. Our Nutristar product, for example, was intended for
developing world markets, yet was developed with a developed world
mindset. It included all of the available technology, rather than being
aimed for a low purchase price. Consequently it proved impossible to
reach all of the consumers who needed the product. Combined with
political instability in Venezuela which prevented us from refining our
business model, this led to Nutristar being withdrawn from test markets.
Managing Sustainable Development The importance of the business case
for delivering sustainable development cannot be overstressed. If we rely
on philanthropy to deliver improved quality of life around the world, it will
only go as far as the funding will allow. If we rely on the moral case alone,
it will be restricted to those companies driven by high ethical standards. If
there is a real business case, however, then such initiatives will continue
to grow and spread, and we can start to achieve the considerable scale
that is needed to deliver against the millennium development goals. Once
there is a real business case, the water will start to run downhill; until now
weve been trying to push it uphill. The real business case requires that
companies link opportunity with responsibility. If the focus stays limited to
just areas of corporate responsibility, the oft-quoted view that
sustainability provides long term value, but short term costs, will prevail. It
can also cause problems with how sustainability is managed within
companies. If it is seen only as a responsibility, sustainable development
will be treated as an issue to be managed, rather than as a business
opportunity to be pursued. Consequently, it will be managed by a
corporate function, much as health, safety and environment has been
managed in the past. Only if responsibility is linked with opportunity is
sustainable development likely to get the attention of senior management
and become built into businesses in a strategic way. In Conclusion to find
the real business case for sustainable development, companies need to
find ways to link opportunity with responsibility. They need to:
Turn attention from just eliminating negatives to creating positives;
Move beyond eliminating non-value to creating new value;
Not just look for market-based solutions, but see the market itself as a
solution; and
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Evolve from seeing the value of sustainability as removing the risk from
business, to seeing sustainability as their business. In no way do we claim
that we, or our company,
have fully figured out the business case for
sustainable development. However, we do know that a robust business
case is necessary to deliver a better quality of life on the scale needed to
achieve the development goals that the world has set.
When Procter & Gamble had to promote Biomat, a laundry detergent in
Israel, they were in a quandary. Their primary audience were the Jews who
were orthodox to the core. They shunned conventional mass media like TV
& radio as they saw it as bad influence. P&G decided to appeal to their
motivation for charity - to help the needy. The initiative included a road
show of a mobile Laundromat - people were urged to give their old clothes
for charity. These clothes would then be cleaned at the Laundromat (using
Biomat, of course) and then given to the needy.
While this may not be the conventional CSR initiative (long term,
cause-related) other such examples abound. In India, Sakthi Masala has
been consistent in its CSR effort to help the disabled. They offer
employment opportunities and rehabilitation centres for the disabled. P&G
India's CSR initiative - Shiksha - has been successfully contributing to CRY.
They motivate consumers to purchase certain brands of P&G - a part of
the sale proceeds are then contributed to the CR fund.
CSR in Pakistan:
Starting with the companys health-related activities, it certainly has done
a magnanimous job. Whether its infant health, issues faced by adolescent
girls or mothers, the company has initiated awareness programs for each
of them. The CSR activity is carried out on a national scale unlike Unilever
Pakistan and is brand-oriented. Like Safe Guard Mother Education
Program, Sehat-o-Safai Program, Always Agahi Program or Pantene Solo
Program, among others. The company has recently launched Khwabon
Sey Aagey initiative in collaboration with the Pakistan Medical Association.
The program is aimed at saving the lives of new born babies.
Similarly, in the education sector, the company is running many
development programs. The initiatives includes building and refurbishing
of schools including those in the earthquake ravaged areas.
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At the same time, the company believed it could save lives by providing a
simple way to purify household and drinking water. Unsafe water supplies
and inadequate sanitation kill more than 3 million people every year,
making this problem collectively more lethal than Aids.
The project stalled in late 2003 when it became clear that the financial
returns for selling a powder product called PUR Purifier of Water did not
justify further investment in commercial terms. At this point, P&G changed
tack, transforming the project into a corporate social responsibility (CSR)
programme. Alan Lafley, P&G's president and chief executive, moved it to
the corporate sustainability department (CSD), itself a new division.
Thereafter, the company developed partnerships with not-for-profit
organisations in social, health services and humanitarian relief to market
and distribute the product more effectively.
Procter & Gamble's partnership with non-profit organisations is proof that
local markets can be won over to new products.
In 2003, a $20 million R&D and marketing project at Procter & Gamble
(P&G) had reached a financial impasse after eight years of work. A decade
earlier, the company had spotted an opportunity to supply a waterpurifying product to the developing world, which, it was hoped, would
increase the company's share of the mass consumer market in the
emerging economies.
At the same time, the company believed it could save lives by providing a
simple way to purify household and drinking water. Unsafe water supplies
and inadequate sanitation kill more than 3 million people every year,
making this problem collectively more lethal than Aids.
The project stalled in late 2003 when it became clear that the financial
returns for selling a powder product called PUR Purifier of Water did not
justify further investment in commercial terms. At this point, P&G changed
tack, transforming the project into a corporate social responsibility (CSR)
programme. Alan Lafley, P&G's president and chief executive, moved it to
the corporate sustainability department (CSD), itself a new division.
Thereafter, the company developed partnerships with not-for-profit
organisations in social, health services and humanitarian relief to market
and distribute the product more effectively.
P&G Pakistan tried the commercial route once more in 2004, but the
results were not encouraging. In 2005, P&G officially announced its new
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non-commercial approach and its decision to sell PUR at $0.04 per sachet,
the cost of production. PUR would be sold at cost to non-profit partners,
but a large number of donations of the product would be paid for by P&G
corporate philanthropy and employee donations.
The new non-profit strategy proved a success and by the end of 2006,
P&G had sold 57 million sachets, at cost, to humanitarian organisations, in
contrast to the mere 3 million sachets sold during the commercial phase.
The biggest lesson of this study is that P&G knew when to close the
commercial venture and when to leverage partnerships with non-profit
organisations to fulfill a broader social need. It did so with clear
expectations about the cost of making it sustainable, meaning that PUR
would be a non-profit venture - driven by a social mission rather than
profits. It left the social marketing - educating the target customer about
the risks of untreated water and distributing the product at an affordable
price - to the non-profit organisations.
P&G first researched new water-purifying technologies in 1991, following a
major outbreak of cholera in Central America. P&G's diluted chlorine
bleach water-purification technology was not well received by all its target
customers in the region, some of whom said that the water looked dirty
and tasted of chlorine. In 1995, the company signed a collaborative
research agreement with the US Centers for Disease Control and
Prevention (CDC) to test and develop water-purification products.
After joining forces with CDC, P&G tested a low-cost water filter in
Guatemala, but local people complained that the filters clogged up too
quickly. P&G then reverse-engineered the municipal water treatment
process, leading to the discovery of the powder product.
PUR is a sachet of powder, which when swirled into a 10-litre bucket of
dirty water results in clean and safe drinking water. It was launched in
2000, priced for a low-income commercial market at $0.08-$0.10 a
sachet. Independent studies show that it is effective in reducing the cases
of water-borne disease, with an upper range of 90% and an average
disease reduction rate of 50%. However, after three years of market tests
in Guatemala, Morocco and Pakistan, the product had not made a profit.
Mixed results came back in 2003, with repeat purchase rates of 5%, 10%
and sometimes 25%.
The decision then facing Lafley was clear: push ahead on the PUR
initiative, given its public health benefits, or terminate the initiative, given
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its costs and low returns. Employees who had worked with the product,
however, found it difficult to shut down a product line that held so much
promise. Greg Allgood, who worked in the consumer health products unit,
recalls an internal memo: "The memo had no conclusion about what to do
with the product, but it was very clear that no product engaged our
employees and our stakeholders - customers, governments, UN groups,
NGOs - like this one."
PUR was relaunched as a CSR product in 2004 within the Safe Drinking
Water Alliance, a partnership comprising P&G and the Johns Hopkins
University Bloomberg School of Public Health's Center for Communication
Programs (CCP), Population Services International (PSI) and UK charity
Care. The Safe Drinking Water Alliance was the first in a series of
partnerships between P&G and non-profit organisations featuring PUR and
was designed as a pilot programme to test three marketing strategies:
social marketing, commercial marketing and disaster and humanitarian
relief networks.
Now working in P&G's CSD unit as director of the Children's Safe Drinking
Water (CSDW) programme, Allgood says: "Our purpose as a company is to
improve the lives of the world's consumers. Our brands, such as Pantene,
Oil of Olay, Always, Tide and Ariel, touch consumers every day in ways
that meet their needs. Our focal philanthropy programme, the Children's
Safe Drinking Water programme, makes our purpose as a company
tangible for our employees and critical stakeholders."
Simple in theory, but finding the right formula is often more difficult. Local
barriers to entry are often tricky to overcome in 'bottom of the pyramid'
markets. Certainly, P&G discovered that traditional marketing methods did
not work; consumers were suspicious of new products that required them
to change the way they managed their lives. During 2004, it began a new
testing strategy. Putting the product into the CSD unit and turning it into a
non-profit venture gave enthusiasts such as Allgood the room to explore
alternative marketing.
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In a Nutshell:
P&G, a giant in FMCG industry, is one of the most efficient
corporations on the global platform
P&Gs success is largely attributed to its corporate
strategies and the management decisions
A fierce competitor in its field, P&G is also environmentally
conscious and tries to do minimise the loss/harm caused
due to their production processes
It constantly makes sure to have its technologies updated
and processes complying all the laws and regulations thus
making sure that its ethical responsibilities are met with
On the CSR front, we can see that P&G has constantly
been active in being SOCIALLY CONSCIOUS AND
CONTRIBUTING and a responsible CORPORATE CITIZEN
The various CSR activities carried out by Procter and
Gamble demonstrate the diverse issues that they have
tried to solve and valuable contributions they have made
Finally, if we look at their activities and their
Mission and Values they tally to a great extent
which tells us that they always have their goals on
their mind while carrying out its business
operations
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