Business Case Study: Procter And Gamble

1/ Give the reasons why this company is an MNC.

Ans: According to Bartlett and Goshal(2000),they define an MNC as a company that: makes substantial investment in foreign countries, actively manages operations in foreign countries and regard the subsidiaries as an important and strategic part of the organization.

Procter & Gamble qualifies as an MNC because of the following reasons:-

i) Management of Operations: Founded by William Procter and James Gamble in 1837, P&G now has both its manufacturing and sales units spread worldwide. Manufacturing operations are spread in regions as varied as United States to Middle East. Also, out of its numerous brands, products like Bounty and Tide are available worldwide clearly showing its coordinated activities both in terms of sales and production units. ii) Control and Ownership: The control in P&G is mostly participatory rather than being authoritative. Its board of directors are highly diverse and are thus is highly appreciated by the business world and the media. It also has a decentralized decision-making process wherein the mid-level managers do not have to always wait for the nod of the senior management. iii) Significant Investments: From the time of its inception, P&G has been into acquisitions. It started with acquiring Thomas Headley Co. in 1930 and since then it has acquired many companies around the world like Folgers’s Coffee,Gillette, Ambi Pur etc. It has also made investments in setting up plants in places like Hungary